Monday, December 08, 2008

In Praise of Discomfort

It's been a long weekend and now there's only a week left before I fly off to Germany for a long holiday. It's going to take some getting used to. On one hand I need time away from my daily routine. On the other, I'm probably going to suffer from withdrawl symptoms of internet and mobile phone calls, wondering what the hell is going on with life if the world is not trying to contact me. I guess it is a case of getting so used to a certain lifestyle that you get withdrawl symptoms when you are away from it. I suspect my mother is going to do her darndest to ensure I have something close to what she considers normal. 

Looks like I am going to have to postpone my trip to Vietnam once again. The schedule looks packed and I don't think I am going to have the available resources to be able to manage two trips so close to each other. I don't know, but it feels really shitty that I can't even get this one thing right. I suspect friends and family are secretly delighted, a sign that I am being distanced from Han Li and her rougher associations. Then again, it's more than Han Li that I'd like to see. 

Vietnam is a country with potential and dynamism - it's a country I'd like to see. I've spent all my life in closseted sections of the world and I'm eager to see something more. A Brit I know once described the Vietnamese as "Rough," while my aunt reminds me from time to time that the Vietnamese are the "Southern Barbarians" described by Chinese history. From my relationship with Han Li, I am inclined to agree with concept of the Vietnamese being rough.  

Then again, if you look at modern history, that roughness is an exceedinly admirable quality. While Singapore and Malaysia had a colonial power that was ready to give them their independence, the French had to be forced out of Vietnam and a few years later, you had the Vietnam War. If you thought kicking out the French and Americans wasn't enough, the Vietnamese then had to contend with Mao and the People's Republic of China. OK, their run military victories came to a screetching halt when they tried to invade Cambodia in the name of stopping Pol Pot's insanity, but the fact that they stood up to three of the five permenant members of the UN Security Council should be admired. 

When you compare the Vietnamese to the their counterparts in Southeast Asia, are the prime example of how giving too much comfort to people corrupts them. Using comfort to corrupt the enemy lies at the heart of Chinese culture. Look at the people who invaded China. First it was the Mongols and then the Maunchus. These hardy steep nomads kicked the crap out of the softer Chinese on the battle field. Then, the hardy nomads realised that it was more fun to have eunachs lick your balls than to heard sheep. The Chinese, in the mean time continued to pile the women and eunachs onto them and moved into their countries by stealth. Eventually the Mongol and Manchu dynasties were replaced by Chinese ones and today, Manchuria has all but dissapeared and Mongolia looks like its heading the same way - (Inner Mongolia is China and Outer Mongolia is precariously hanging in between Russia and China). 

In Southeast Asia, this aspect of Chinese history tends to be glossed over. After all, if you look at the economic development of the region, you'll find that it was the Chinese that built up the economy - the Chinese control of the economy in Indonesia and Thailand became so obvious that the Indonesian and Thai governments had to force the Chinese to adapt Indonesian and Thai names. The Chinese, needless to say, have complied when at home - Mr Riady of Lippo Bank in Jakarta quickly becomes Mr Li whenever he's elsewhere. 

I suspect that the reason why the Chinese could succeed overseas in ways that they couldn't when they were back in China was simple - they were no longer number one and where often at the wrong end of the sticky stick. With the exception of Singapore, Chinese in Southeast Asia remain in the minority and often a discriminated against one. Even the superrich Indonesian Chinese are well aware of their vulnerability. It was not long ago when even the very wealthy feared for their lives.

Singapore stands out in Southeast Asia as an interesting test case on the human reaction to comfort. Officialdome will never admit it, but Singapore was built by the rough illiterate Chinese businessman. These were men who came off the boat from China with very little except the desire to succeed. Lee Kuan Yew himself, admited that it was the Chinese educated that caused revolutions. The English Educated, of which he was part of, simply had no incentive to cause a revolution. So, the man who reffused to learn a Chinese language in his youth and insisted that he spoke "English" (As spoken by Englishmen and not Singlish) forced himself to learn Mandarin and more importantly Hokkien in the space of six-months. 

If you talk to Westerners and Singaporeans alike, many will place Lee Kuan Yew's genius in the way he built up Singapore. While I am greatful to his success and have benefited from it, I believe his real genious was in his ability to know people. He came to power because he promoted an ideal that a driven and self-reliant people could resonate with. However, he realised that the very thing that brought him to power was the very same thing that would drive him out. So, what did he do, but corrupted the local Chinese by making life so comfortable that they'd never revolt. Thank goodness! Life in Singapore is wonderfully comfortable, so much so that Singaporeans have become contemptuous of people who fight for their beliefs. Just ask a randome Singaporean what they think of Tibet or Palestine and chances are they'll tell you that the Tibetans and Palestinians should stop killing themselves for a lost cause accept their assimilation into China and Israel, respectively. - Gene Rodenbery, creator of Star Treck could not have writen a world for the Borg (Resistence is futile) better. 
 
But there's a propblem here. How do you keep the population comfortable enough not to rebel but not so comfortable that they stop chasing the almighty dollar? 

The answer thus far has been to create a "One-Cheque" economy. To foreigners, Singapore remains wonderfully open to foreign investment. As one Indian expat said, "Dealing with EDB is a dream, especially after you've dealt with the Indian version." To Singaporeans, life is good, provided you work for the government, a Temasek Listed corporation or a mutlinational dependent on government contracts. The encouragement of self-starter entrepreneurs stops at Ministerial statements on the benefits of SME's to the economy. 

How does this "One Cheque" economy work? It's simple. The government finds a pet project, writes a cheque and then watches the cheque trickle down to the common man. If the common man has spare cash, it is quickly soaked up by an increase in a tax or tarrif, thus ensuring all money remains with the government. Furthermore, keeping spare cash to become financially free is subtly disincentivised - the interest rates for a basic savings account have yet to climb above 2 percent per annum (Standard rate 0.25% pa) 

Ah Seng "The Dustbinman" will have enough to eat and a roof over his head. However, he'll only be allowed to earn enough to keep body and soul together - GST for example, subtly creeps up along with wages. So, when you earn more, you'll find yourself spending more just to stay in the game.

What happens to those who have the audacity to think they can get a living outside the official cheque? To a certain extent, we allow them to stay around as long as they don't inconvenience officialdome. Hence, an SME will never get access to credit, especially when it comes in competition with a multinational. An SME will also never be able to look to the law courts to protect them from monopolistic behaviour - the market is after all "too small" for competition (A line usually uttered by those holding the monopoly.) 

The "One-Cheque" economy has made life comfortable and forigners, particularly those with a pale complextion are usually suitably impressed. But as a member of an investment authority from the Arabian Gulf quickly discovered about Singaporean companies - "They have NO MONEY." 

So, how long can this situation last? Can the government continue to guide the economy from strength to strength? Only the insane would suggest that this government is infalliable - one only has to look at GIC's investment in Citigroup and UBS to realise this. Anyone with sanity will realise that senior GIC officials stating that they are investing for the "Long Term" or government officials stating that the mistakes they make must be taken in light of their wonderful track record is complacent. Anyone who accepts statements like, "The Minister says," reduces himself to a eunach and while eunachs did live a comfortable life in the Forbidden City, they served no real purpose outside of it. 

If Singaporeans had the self-reliance of their counterparts in Hong Kong, this might not matter so much. People would find alternative cheques to live on. Unfortunately, this isn't the case, we're still waiting for the top men to finish getting their arses cleaned by the eunachs. 

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