I just think the gen y today will be in deep sh$t when they retire because
A) their cpf will be insufficient to cover their retirement
B) their savings (housing) needs to be sustained by ever increasing ponzi pop growth else it will be like japan.
C) insufficent working population or tax base for a decent safety net.
Working til 67 helps some, bringing in younger immigrants helps some, but ot is ultimately not a solution because the indigenous population will never want to pay the present price in undercapacity in public services, overcrowdedness, inflation, etc. Just look at spain greece italy japan they are all going to the dogs. Norway has oil, USA still has a young growing population And the world's reserve currency.
Maybe im just a pessimist!
(01-02-2013, 01:53 PM)specuvestor Wrote: [ -> ]Right in that CPF is insufficient for a comfortable retirement.
NUS prof said enough leh..
http://www.mom.gov.sg/Documents/retireme...PF-IRR.pdf
with conditions of course.
If the foreign investments of GIC and Temasek are doing fine, theoretically, the investments should be able to tide Singapore over the period of aging population through collected dividends and monetizing of investments. The investments that we have now should fund a deficit budget during the period of declining economy. Once the period is over and the ratio of workers versus retirees has increased to a sustainable level, the country can return to a balanced budget again.
(01-02-2013, 11:24 AM)safetyfirst Wrote: [ -> ]Some forumners here seem to suggest that population must grow for the economy to grow, so that there will be jobs.
China has the largest population, why is the size of its economy only one-third of the USA?
If economy stays the same size while working population drop, wont jobs be more readily available since our children have fewer competitors?
Simplistically it's a function of population X per capita output. If your population (to be precise working population) goes down and per capita output remains the same, GDP will be down. The former variable is easier to manipulate ie by population growth while the latter is more difficult ie by productivity gains or higher value add. Manipulating the former variable is what Stiglitz termed as growth by perspiration.
Like I said if we project flat population next 30 years then it gives a better picture of how much replacement is actually needed.
(01-02-2013, 03:09 PM)yeokiwi Wrote: [ -> ] (01-02-2013, 01:53 PM)specuvestor Wrote: [ -> ]Right in that CPF is insufficient for a comfortable retirement.
NUS prof said enough leh..
http://www.mom.gov.sg/Documents/retireme...PF-IRR.pdf
with conditions of course.
If the foreign investments of GIC and Temasek are doing fine, theoretically, the investments should be able to tide Singapore over the period of aging population through collected dividends and monetizing of investments. The investments that we have now should fund a deficit budget during the period of declining economy. Once the period is over and the ratio of workers versus retirees has increased to a sustainable level, the country can return to a balanced budget again.
Another way to look at it is that we have US$260b foreign reserves. Assuming about $25b in foreign debt and we have 3.2m Singapore citizens, if we "liquidate" Singapore we would have US$73k per citizen. Depends on how u play with the numbers to see if that is "enough" for retirement deficits. In general I see no problem funding for a recession, for eg 97 when govt was still talking of "rainy days" (?), but a structural deficit is very difficult to arrest.
(01-02-2013, 11:24 AM)safetyfirst Wrote: [ -> ]If economy stays the same size while working population drop, wont jobs be more readily available since our children have fewer competitors?
The above is true for closed and mostly closed economies. For open economies, competition is global. Capital will come to Singapore only if labour is supportive. If there is insufficient labour (AND if there is no real local market to speak of) capital (along with the jobs) will simply move somewhere else.
The is also one other finer distinction. The jobs that will move will be those that are tradeable and not those that are high or low value add. Personal trainer to the rich and croupiers at the casinos are non-tradeable and so will stay in Singapore. Radiologists (people who interpret X-rays) can move because the service can be done at a distance. There will also be differences within professions e.g. litigation lawyers (those who argue the case in court) will stay in Singapore, conveyancing lawyers (those who process real estate transactions) can be done anywhere in the world with the cheapest lawyers.
In the final analysis, the population size will also determine whether businesses along with their attendant jobs may or may not end up being viable.
To put it very simplistically, crudely and selfishly, you would want more FTs to come into jobs below you and you would want to limit the number of FTs who come into jobs as your peers and your bosses. The former reduces your cost of living and increases your earning potential, the latter increases your cost of living and decreases your earning potential.
(01-02-2013, 10:55 AM)specuvestor Wrote: [ -> ] (01-02-2013, 06:48 AM)Thriftville Wrote: [ -> ]specuvestor, it's true that we become subordinates. But, it's a higher level subordinates. Ang mo takes the top of food chain, we take middle, other developing countries become bottom feeder.
At least, we are better off with MNC.
I actually agree with you. The MNC model has worked very well in the past 50 years to bring us where we are today. 50 years ago the govt had to think of the fastest way to up employment for the 2m people who chose to be Singaporeans, of which 500k would be jobless when the British leaves. It was like China in the last decade: objective was not quality, it was quantity of jobs. As time went by we upgraded our labour force to whatever the MNCs required and improved the quality and value chain through investing in our people, primarily through education.
But it has its side effects: Singapore Chinese are probably the most un-entrepreneurial Chinese on the planet. Singaporeans' dream is to be CEO. Taiwanese don't even bother to interview CEOs, they look up to the chairman who is usually the founder. Most Singaporeans don't even know what is the purpose of Chairman.
But back to the topic: the question was whether FT increase the quality of our labour force. There are certainly some spillover effects, but I would think that is to much lesser extent than what academics or govt thinks (or maybe misrepresent) due to this MNC mentality. Those on the top are not transferring their skill set downwards. The challenge is how do you coerce that in formulating policies? FT are certainly useful to plug the capabilities gap, but it is highly debatable if their quality is significantly better than those areas which we have developed skills in.
specuvestor, thanks for your great analysis! Now I see where u coming from...
I feel FT does affect locals, in the sense that local might be deprived of the opportunity to climb upwards. Hence, unable to acquire higher-leveled skills.
Afterall, MNC belongs to foreigner, not Singapore. They brought the technology, market share, business network to us. So, I would think that it's rather fair for them to hire whoever they want. They don't owe us a living.
To increase the quality of our labour force? Like you said, we should be having our own entrepreneurs. Then, we need less FT. The locals will also get better pay & higher skilled jobs.
So, should we start working hard?
(01-02-2013, 11:44 AM)Ben Wrote: [ -> ]I don’t see how the economy can stays the same if working population drop. It is interrelated.
I agree that demand/consumption will drop when working popoulation drops. However it can be offset by an increase in exports (which means that we have to produce value-added services or goods).
Do we need to overspend on defend although it is important to us ?
(01-02-2013, 01:53 PM)specuvestor Wrote: [ -> ]Wrong as in assuming CPF is enough but a kind of "ponzi". CPF is denominated in S$ and govt has the ability to print S$. This is very different from our foreign reserves, though related. We need the reserves to buy foreign goods and services but CPF will NEVER default on S$ liabilities, but we will starve cause we can't import say thai rice if we don't have foreign currencies to pay for it. The printing of course will not be free: it will be shared by the populace in terms of reduced purchasing power and inflation tax. To put it to the extreme, Zimbabwe will never default on its domestic bonds, question is whether you want their bonds at 1bio % (no typo) inflation a day. Default of domestic quasi-govt liabilities is red herring; similarly if we get cheap devalued S$ in future for retirement, I doubt we will be happy that CPF system is solvent.
That's why I never understand why some folks always like to allege that the Singapore Government will default on CPF. Although what you suggested is absolutely correct, i.e. Singapore Govt can never default on SGD based debt as the debt can be repaid via money printing, there is ABSOLUTELY no need for the Govt to do so.
If you are interested in reading the Balance Sheet of the Govt, please see here:
Statement of Assets and Liabilities
Some of my observations are:
* There is idle cash of >100 billion while CPF holders are paid 2.5% to 4.0%. I would estimate that CPF money could be in the region of up to 200 billion which falls under the category of Government Securities Fund. This (the CPF interest) is actually acting as a significant drag on the government's annual budget.
* Our govt has set aside a lot of money for various purposes, including edusave, eldercare, contigency, etc.
* Approximately 186 billion is unallocated, i.e. can be drawn upon in an emergency
Do note that all these funds do not include MAS reserves of >300 billion...
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To increase the quality of our labour force? Like you said, we should be having our own entrepreneurs. Then, we need less FT. The locals will also get better pay & higher skilled jobs.
[/quote]
It is going to be a tall order for Singaporean's young to cultivate an enterprenial spirit. Young kids (even the very bright ones) are being shepherd from one enrichment to another. Just look at Learning Labs’ ad that boast that out of the top 17 PSLE students, 8 (or is it 9) are their students. Kids that are that bright should not need to attend Learning Lab any more. The time should be spent on cultivating their interest, curiousity and other soft skills. They will then become truly well-rounded. Instead they are being loaded with more and more knowledge. We will churn out a team of doctors and lawyers.
Innovation, Independent thinking are also important attributes that an entrepreneur needs. However a people like that are also able to think more critically and will not be so easily “persuaded” by our MSM. Which govt will intentionally produce a group of citizens that will challenge and make it lose its absolute power?
Society will stratify even more in future. Most middle class is middle class in name only. It’s going to be a non-stop slog just to service the house and car and enrichment fees. Those aunties/uncles that are not working and enjoying coffee in kopitiam now? We will not see such people 30 years down the road. Because the former generation paid $7,500 for their HDB flats and the current generation pays $750,000. Even if the current batch is willing to forgo Starbucks for 3-in-1 for step-down living, also cannot. Because the debt chain will only unlock after 30 years. And with the non-stop influx of immigrants, I wonder what will happen to those retrenched in their 40s and 50s. Now still can drive taxi and earn enough for daily living. But 20 years down the road? Taxi can still pay for daily living but what about the Debt?
Sometimes I wonder if the high debts for mortal people are there for a reason? So the threadmill is always on? So mere mortals have no time to look into “frivolous” topics like politics?
Is this the end of this thread title?
I would like to see my base case scenario being published
SINGAPORE: National Development Minister Khaw Boon Wan has stressed that the projected
6.9 million population by 2030 is the "worst case scenario".
In his latest blog post, Mr Khaw said the government hopes that the country does not reach that figure and added that it may never reach it.
Mr Khaw said as planners, the government has to ensure that the infrastructure can accommodate such a figure if need be but it hopes that the actual figure would turn out to be much lower.
Mr Khaw said infrastructure must be built ahead of demand and some planning assumption is needed in order to achieve it.
He explained that in any long term plan, a key assumption is the projected population size.
Mr Khaw said the White Paper on Population released this week offers the basis for one such projection but he stressed the projection is not a forecast or a target.