[Ramcem]

Dear all,

In S'pore, the next man I will listen closely to after Lee Kuan Yew is Ngiam Tong Dow. Sometimes I value his insights more than Lee Hsien Loong or Goh Chok Thong himself.

I will share some of his articles periodically on his views on S'pore through his experience.

~Ramcem

**************************

China and India: Giants on the Move

By Ngiam Tong Dow

Straits Times, July 4, 2005


China and India are vast countries with huge populations. The redoubtable Deng Xiaoping opened China to the world in 1978. India, on the other hand, had been the world's largest democracy all along. Yet, until very recently, India lagged behind less well-endowed countries.

At the risk of being totally wrong, I would venture to suggest that India was held back by its brilliant sons and daughters educated at the London School of Economics after World War II. They were steeped in the theories of Fabian socialism stressing social justice more than production and productivity. Though the Chinese were ideologically Communist, the Chinese state concentrated on education in science and technology.

Their respective education systems may explain the differences in the levels of economic performance of China and India in recent times.

The China system

IN CHINA, from ancient times, those who sat for the Imperial examinations were asked to write essays on practical subjects, such as flood alleviation.

The testing and stimulation of the practical bent of mind led to the building of the Grand (north-south) Canal, probably the longest man-made inland waterway of all time. The Great Wall of China is probably history's greatest civil engineering feat.

Unfortunately, political science failed the Chinese. It did not stop the barbarians from invading China. The Mongols and the Manchurians were more advanced in the art and science of war. The best Han brains were numbed by rote learning of the Confucian analects. From being great civil engineers, they became poets and artists. The establishment became effete. Dispossessed peasants rose in revolt and swept away the dynasties. They established their own, which in turn were overthrown.

During the Cultural Revolution, the Thoughts Of Mao Zedong were studied religiously. Polemics and propaganda became the order of the day.

Fortunately for China, the literary tradition of Chinese education was replaced by the Stalinist Soviet model of boiler suits and engineering. It is no accident that both President Hu Jintao and Prime Minister Wen Jiabao, and most of the current Chinese leadership are engineers by training.

When the shackles of the command economy were dismantled, the engineers who were more practical minded took charge of the state-owned enterprises and transformed them.

The Indian way

IN CONTRAST, the Indian Civil Service was staffed by men and women who received what can be broadly described as a classical education in philosophy and politics. They were trained to govern, not to administer.

The Indian Institutes of Technology were established to balance the faculties of law and economics, but not on the same scale as in Chinese education. It is therefore not surprising that China, like Japan, excels in manufacturing hardware, while India specialises in services outsourcing.

Singapore's own

WOULD you prefer to be the economic planner of Singapore, or of China?

In May 1959, the PAP swept to power in Singapore's first General Election, winning 43 out of 51 parliamentary seats, with 53.4 per cent of the popular vote. The Government, led by Prime Minister Lee Kuan Yew, was confronted with a stagnating economy, urban slums, high unemployment and municipal corruption. Bribes, otherwise known as 'coffee money', had to be paid for taxi and hawker licences, planning and building approvals and a myriad of dispensations from the civil servant.

Ten years earlier, in 1949, the Chinese Communist Party (CCP) swept the effete and corrupt Kuomintang out of China and sent them fleeing to Taiwan. China was a large densely populated country dependent on subsistence agriculture. The Chinese government resorted to Stalinist central planning.

It told the world that there was no unemployment in China. A job in a bank, which would be done by one clerk in Singapore, was shared among four. This was demonstrated to me when I went to a Chinese bank in the 1980s to change US$ travellers cheques into RMB Foreign Exchange Certificates. Four clerks were involved in the transaction.

In 1978, Deng Xiaoping toured the southern provinces and launched the 'open door' policy. He removed the dead wood of Communist dogma and doctrine. By raising the banner that it is virtuous to be rich, he unleashed the boundless entrepreneurial spirit of millions. In having the political courage to break the iron rice bowl, he set China on its current dazzling phase of economic development.

In 1959, a young Lee Kuan Yew also stirred Singaporeans to strive by his slogan that nobody owes Singapore a living.

Leadership models

BUT economic growth thrives only when societies are politically stable. Political stability emerges when there is strong, competent and incorrupt leadership. The real question is: How is a country's leadership chosen?

There are two models of selection. The first is the model enunciated in Plato's Republic. Peers choose the leader who becomes the philosopher king. He is the first among equals.

This is also the model of the CCP, where the party leader selects the cadres who in turn elect him as the leader. Under this system, a change of regime rarely occurs. Leaders may change, but not the party. In Communist idiom, this is known as the dictatorship of the proletariat. The greatest danger is that the party can become fossilised over time.

The opposite of a closed system is free and fair elections. Every citizen of voting age, normally above 18 years of age, has one vote. The candidate who wins the most votes is elected a Member of Parliament (MP).

The leader of the party with the most number of MPs forms the government. A variant is to elect a president who selects his own government from among the MPs or non-MPs. As elections have to be held at regular intervals, normally four or five years, the citizens of a country can change their government without having to resort to rebellion or bloodshed.

The system of democratic elections only works if the citizens are well informed and educated. It works best when there are at least two or more political parties led by able and incorrupt people. Though they may have different ideologies, they must believe in 'one country'.

The most important condition for success is good government, led by able, honest, selfless men and women. Though political labels can be misleading, I would stick my neck out and say that Singapore's founding fathers are pragmatic socialists. I believe that Mr Deng Xiaoping and his political colleagues are also pragmatic socialists.

Bake the cake first

THOUGH China is a socialist state and Singapore a democracy, the economic philosophy is essentially similar, which is to ake the cake first. The economic strategy of both countries is the creation of jobs and the provision of affordable housing.

Our first Minister for Finance, Dr Goh Keng Swee, one day told me he felt depressed every time he passed by a school at the end of the school day at 1pm or 6pm.

When I asked why he felt depressed, he asked me how were we going to find gainful unemployment for the 25,000 to 30,000 school-leavers each year.

In the first 10 years of economic development, 1960 to 1970, labour-intensive industries - garments, hair wigs, transistor radio assembly and ship breaking - saw us through. The label 'high tech, low tech' never entered our vocabulary. Any 'tech', so long as it could give school-leavers jobs.

From a high unemployment rate of over 10 per cent in 1960, we created enough jobs by the mid-1970s, to achieve what economists call full employment, ie unemployment rates below 3 per cent.

Similarly, the HDB cleared slums and unsewered kampongs to build enough flats to house 85 per cent of our citizens by the mid-1980s. In fact, a strong economy providing high CPF savings led the HDB to overbuild. Today, there are some 10,000 flats lying vacant.

In 1980, I accompanied Finance Minister Hon Sui Sen to Beijing to sign a trade agreement with China to allow for the establishment of trade representative offices in Beijing and Singapore, as a precursor to full diplomatic relations in 1990.

We called on Mr Deng Xiaoping. Mr Deng complimented Singapore on its high economic growth rate. Our per capita GDP was then around US$5,000. Mr Deng said that China's per capita income was about US$400. His ambition was to raise it to US$1,000 by the year 2000.

Mr Deng stated that China's GDP would be US$1,000 multiplied by 1.2 billion people. Its per capita GDP today is above US$1,000 (S$1,670). It is the world's third largest economy.

If China continues to grow at 8 per cent a year consistently, it will be able to achieve full employment in 40-50 years' time. On a much smaller population base, Singapore achieved full employment in 20 years. There are already reports of labour shortages in China's burgeoning industrial cities.

One hundred Lee Kuan Yews

I ONCE overheard a conversation among three Chinese officials who were at the Ministry of Finance to learn budgeting from Singapore officials. One of them said that the difference between Singapore and their own country was that Singapore only had one Lee Kuan Yew, while China had a hundred. What he meant was that it was a hundred times more difficult for a Chinese vice-minister to navigate the power structure in his government than his counterpart in Singapore. The Singapore permanent secretary suffers far less stress than his Chinese host.

While it is true that we can get things going faster in Singapore, I need to say that we are only good for short sprints. On the other hand, China runs the marathons. As a nation, China has more people and talent. As a professor friend of mine said, even if the Chinese are no cleverer than other races and assuming that only 0.000000001 per cent of a population are geniuses, China with a population of 1.2 billion people would have 12 potential Nobel Prize babies born each year. The big 'if', of course, is whether they will receive enough nurture in education to realise their potential.

Being big players on the world stage carries with it its own burden. China and soon India not only inspire respect but also attract fear. Taiwan will continue to be manipulated by the United States and Japan to keep China off balance. A British-partitioned India will always remain divided because of two antagonistic religions. Because of the burden of their size, it will take both these Asian giants several generations to go from Third to First World.



The writer, a retired permanent secretary, is chairman of HDB Corp.

[DoorKeeper]

Makes quite interesting reading.

[Ramcem]

Your future is built on the present which was built on history. That's why Winston Churchill ever said, "The further backward you look, the further ahead you see."

~Ramcem

[Ramcem]

SPEECH BY MR NGIAM TONG DOW AT THE INAUGURAL FASS (FACULTY OF ARTS & SOCIAL SCIENCES) LECTURE AT THE LECTURE THEATRE, NATIONAL UNIVERSITY OF SINGAPORE, ON 26 OCTOBER 2004

EDUCATION AND GROWTH

Professsor Tan Tai Yong, dear friends and fellow alumni

Thank you for having me this evening as speaker for the inaugural FASS Alumni Lecture. I am deeply honoured. I will speak on “Education and Growth”, relying on the Singapore Experience during the period 1960-2000.

1. Synopsis
In my view, education has three imperatives, namely the economic, the cultural, and the political. Over the last forty years, 19602000, the overriding priority of education has been economic growth.

Faced with a young and rapidly growing population, our schools, polytechnics and universities were all geared up to teach literacy in English and the mother tongue, technical skills, science and technology. Literature and the arts, history, geography, were derided as soft options. Even those who excelled in law in their professional careers later on in life, struggled to obtain A’s in the hard sciences in school.

Now that the world is entering an era of knowledge based competition, we are unsure whether our hard science education will stand us in good stead. By neglecting the "soft options" of poetry, music and philosophy, have we missed something? What has happened to our imagination? Do we find it difficult to think out of the box? Why are the majority of Singaporeans followers? Isn’t that true of all societies? And not just Singapore?

Politically, do we want to be a Sparta? Or an Athens? Ideally, can we be both? Where do our political temperament and instincts lie? I would like to invite you to join me this evening in debating this proposition: While it is true that man cannot live by bread alone, can he live without any bread at all?

2. The Three Imperatives of Education
Education has to serve society’s cultural, political and economic imperatives. The priority and emphasis depend on a country's time in history and its stage of development. In the case of China, the political imperative was paramount during the period of the Cultural Revolution. In contrast to Chairman Mao's ideological leadership, Mr Deng Hsiao Ping, seeking truth from facts, brought the economic imperative to the fore.

3. Historical Developments
At the end of the Second World War on the return of the British colonial Administration to Singapore, English medium schools funded by the Government were quickly re-established. During the brief period of the Japanese Occupation (1942-1945), the Japanese civilian administration used the private Chinese medium schools to teach
Japanese to youngsters like me. Japanese was taught whenever the Japanese supervisor was around. Teachers and students reverted to Mandarin the moment he was out of sight. In this way, I had one year of schooling in Mandarin.

4. English Medium and Vernacular Schools
The British colonial government funded and staffed only the English medium schools. Vernacular schools in Chinese and Tamil were left to fend for themselves. They were financially supported by the various ethnic clan and community associations. Teachers were poorly trained and poorly paid. Most parents sent their children to English
medium schools, as school fees were lower and facilities better.

Being poorly paid, some teachers in Chinese schools became embittered and taught leftist ideology to their students. The Chinese Middle School Union was a powerful political force, which the PAP Government had to contend with.

English medium schools on the other hand were apolitical. The aim of the British Government was to teach English, so that young Singaporeans can serve as clerks and bookkeepers, primary school teachers and nurses, and policemen. The British Colonial Government, supported by our own philanthropists, established the King Edward VII School of Medicine and Raffles College. The two institutions merged in 1949 to become the University of Malaya, serving Singapore and Malaya. The Law and Engineering Faculties of NUS were established later in the 1960’s.

Colonial education policy was essentially aimed at oiling the wheels of administration.

5. Jobs and Technical Education
On the attainment of self-government in August 1959, Singapore had a population literate in English, an advantage over other non-English speaking countries in attracting American and European MNC’s. The population however possessed little technical skills. Paradoxically, the Chinese-educated possessed more technical skills
through apprenticeship. This skilled labour went on to build complex steel structures, such as jack up oil drilling rigs.

The indigenous skills however were not adequate for higher end precision engineering and process industries. EDB was tasked with starting up technical education in Singapore. We established joint industrial training centers with MNC’s, such as Philips of Holland, Rollei of Germany, Seiko and Yokogawa Electric of Japan. The industrial training systems became models for our six polytechnics today.

6. The Economic Imperative
In the first three decades of independence, the economic imperative was the driving force of our education policies. In our schools, attention was focused on the teaching of science and mathematics dubbed the hard sciences. All other subjects were derided as soft options.

As a result, less and less students in English medium schools studied English literature. Paradoxically, it was harder to score an ‘A’ or distinction in English literature than in maths or science, simply because English is not our mother tongue at home. Without studying literature and history, whether in English or Chinese medium schools, our literacy in both languages fell.

History is a neglected subject in all our schools. Politically, we have been an independent country since 1965, hardly 40 years old. In world history, we rate only a comma. Yet our multi-racial and multi-religious society must retain our roots. Without a sense of history, we will become a people lost in limbo.

7. Singapore's Path?
In the first half of our short history to date, Singapore had no choice but to embrace science and technology for economic survival. At a very basic level, we established industrial training centers to train our young school leavers in precision machining and mould making, still the core skills for manufacturing industry. At the polytechnics, students are taught process engineering and technical analysis. They also learn finance and cost accounting. As our manufacturing and service industries grew and became more sophisticated, there was a great need for trained manpower who can go beyond the "how” to the "why" of things.

8. Nanyang Technological Institute
When we had achieved full employment in the mid-1970’s, our Economic Advisor, Dr Albert Winsemius, persuaded Prime Minister Lee Kuan Yew to establish the Nanyang Technological Institute (NTI), to train practice oriented engineers, to complement engineering science taught in the University of Singapore. The EDB, nicknamed metal eaters by Mr Lee, had boldly asked that our university, polytechnics and industrial training centers produce 1,000 engineers, 5,000 technicians, and 10,000 skilled workers annually to meet surging demand for technical manpower.

The elitist establishment at University of Singapore baulked at increasing the engineering enrolment, raising the spectre of unemployed graduates. The professors had little faith at the ability of EDB to attract high tech jobs to Singapore. Yet, even in the recent recession, MNCs still find difficulty recruiting skilled personnel for tech
industries, such as wafer fab plants. As a result, a number of them are relocating to China.

NTI was therefore established as a university of science and technology. To establish its academic credentials, NTI was allowed by NUS to award a joint degree with NUS. NTU now conducts degree programmes in almost every academic discipline other than medicine and law.

As someone who had a role in the establishment of NTU, I hope my university colleagues will allow me the privilege to state once more that the aim was to establish NTU as the MIT, and for NUS to become the Harvard of South-east Asia. The goal of all academic institutions must be excellence in both teaching and research. Simply
establishing new faculties and departments because the other university has such a department will just distract the faculty and administration of both universities from the drive for excellence.

9. Cultural and Racial Roots
Out of sheer necessity, we concentrated on the economic imperative in education. Efficiency, rather than effectiveness, was the name of the game.

Along the way, we also lost some of our cultural roots and ethnic instincts. In the late 1960’s, the Government decided to drop Chinese dialect programmes over radio and TV. There may be compelling reasons for stopping Hokkien, Teochew, Cantonese, Hakka and Hainanese programmes over the airwaves. One reason given was
that we wanted our children to concentrate only on learning Mandarin, and not have their young minds confused with the various dialects spoken at home.

Whether this hypothesis is true or not, we do not know for sure. But, we do know that the grandparents who speak only dialects and no Mandarin, were deprived of one of their few sources of news and entertainment. As less and less dialect was spoken at home, the communication gap between the young and the old widened. Transmission of cultural values from generation to generation was diminished. Our children and grandchildren had to learn to speak Mandarin ab initio, and to study the Chinese language outside what was our natural cultural environment.

Today, we cannot go back to the status quo ante. It will be pointless to restore dialect programmes back to our airwaves simply because the young grandparents of today do not speak any dialects at all, growing up under the non-dialect regime. A back of the envelope solution might be to encourage our English-speaking to read Chinese
history, literature, and even poetry, in English to enthuse their grandchildren on their Chinese heritage.

Though translations will not have the richness of the original, they do give the English literate some flavour. We can start by reading Lee Lien Fung's Bamboo Green columns in the Straits Times.

10. Literature
With the neglect of English literature in school, young Singaporeans do not have enough command of English to absorb the essence of western culture. Hollywood is their western cultural diet.

At the same time, unable to speak to their grandparents, they cannot relate what little culture they are taught in their Mandarin lessons to their daily lives.

My generation, schooled entirely in the English medium and speaking dialect at home, can at least get a flavour of Chinese history and culture reading the English translations of All Men are Brothers, Dream of the Red Chamber, and Lin Yu Tang's My Country and My People.

11. Humanities and the Arts
In education as in any field of human endeavour, we have to face reality. Our single-minded pursuit of economic prosperity has brought us to a crossroad. In a knowledge-based global economy, inputs of land, labour, and capital, are necessary, but not sufficient for growth and prosperity. We have to learn to apply knowledge creatively.

A vice-minister of Japan's Ministry of Trade and Industry once told me that knowledge is power, if applied with wisdom. Or, with insight and creativity. How do we become a society with insight and creativity?

12. Holistic Education
The short answer is a holistic education system. Such a system will have to serve all the three imperatives of education, the cultural, political and economic. We have successfully established industrial training centers, polytechnics, and universities, to teach the “how” but, in my view, not the “why” of things.

At the risk of being dismissed as an educational Rip van Winkle, may I suggest the Ministry of Education revisit the grouping of subjects for the O Level examinations. In 1953, when I sat for what was then known as the Senior Cambridge School Certificate examination, candidates were required to offer not more than 9 subjects, divided into three groups of English and English Literature; Mathematics and Science; History, Geography and Art. Latin and Religious Knowledge were optional subjects.

A candidate has to pass in at least two subjects from each group, graded into pass, credit and distinction. Your scores determine your overall grading into Grade I, II, III. Only those with Grade I were admitted into the Post School Certificate classes to prepare for university entrance examinations.

13. Arts and Science
The curriculum required competence in arts and science. In my view, a broader rather than a narrow curriculum is likely to produce greater creativity in individuals, and society as a whole. The competition for entrance into university is at the final stage of schooling. Streaming at too early a stage is not only unfair to the individual student, but is also less effective overall in terms of cost.

14. Becoming a Nation
The prosperity achieved from pursuing the economic imperative in education comes with a cost. Mr Robert Kuok, the Malaysian entrepreneur whom I know and greatly respect, once told a private gathering at NUS that to survive beyond economics, Singapore has to retain its Chineseness, and by extension its Indianness and
Malayness. It was not a rhetorical answer to a rhetorical question.

Because of our political history, Singapore embraced English as the lingua franca. As English is also the language of international commerce, science and technology, and the language of today's only world superpower, the United States, our literacy in English gave us a head start in attracting MNC investments. Our pragmatism led us to adopt English as our first language, and our mother tongue, whether it is Malay, Chinese or Indian, our second language.

Our legal system based on English law is understood and accepted by international banks, shipping companies, fund managers, and the rest of the international business community.

As Microsoft dominates the internet, software is largely written in English. So those fluent in the English language, have an advantage in writing software than those who are not. Hence, Indians who are more literate in English have an edge over the Chinese.

15. Cultural DNA
But is language facility the only competitive criterion? Or is it the cultural DNA of the Indians, Chinese, and Malays that will count increasingly in the new millennium? Mr Robert Kuok is right in stressing the importance of remaining culturally Chinese, Indian, and Malay.

16. The Future of English
MM Lee, in his memoirs, said he sang three different national anthems living in Singapore. First, as a schoolboy he had sung God Save The King in English, in the crown colony of Singapore before the Second World War. Then, for three short years, he sang the Japanese national anthem during the Japanese occupation of Singapore. On the defeat of Japan, it was back to God Save The King. Finally, the Singapore national anthem Majullah Singapura when we obtained self-government in 1959, composed by the late Mr Zubir Said, a Malay Singaporean and sung in our national language, Malay.

The origin and language of the national anthem is determined by the political power governing Singapore. Now that Singapore is an independent country, the origin and language of our national anthem is settled. Singapore however has still to evolve its own national cultural identity.

17. China and India
Western civilization, which has spawned most of the major discoveries in science and technology, has been in the ascendant for the last 500 years. Before then, the Chinese, Indian and other civilisations have been in the forefront of the quest for knowledge. Not being a historian, I will stick my neck out and postulate that western civilization overtook eastern civilisation because the peoples and societies were more outward looking, including conquest and colonisation of foreign lands. An outward orientation forced on us by necessity has enabled Singapore to make progress.

Continental size countries, such as China and India, stagnated because they considered themselves to be the centres of the civilised world. China named itself as Zhong Kuo, center of the world. There is a rock outcrop on the island of Hainan, my Chinese ancestral homeland, facing south, which is considered as the spot where the
civilised world ends.

Similarly, my impression is that Indians consider themselves to be morally superior to other people. Gandhi coined the slogan of simple living and high thinking. But when India goes on to imply that this is the only way to progress, it falls into the Chinese trap of ethnocentricity.

18. Japan
Japan, like India and China, has supreme confidence in its own culture. I once read in Japan Echo, which publishes Japanese "think" pieces in English, that foreigners can never penetrate Japan’s cultural barrier. The author, a professor in Japanese economic history, held the view that while Japan can be forced to lower import duties,
remove quantitative restrictions, or reduce non-tariff regulations, the cultural defence of buying Japanese first is a barrier other countries cannot penetrate. Japan does not promote the study of English. Instead, there is a huge translation industry publishing Western works in Japanese.

Japan, unlike China and India, is not a continental country. It is an archipelago of islands with the sea as the border. Though insular by nature, Japan has no choice but to trade with the world. The orientation is outward. Ezra Vogel, a personal friend of mine, who wrote Japan As No.1, would have done the Japanese a great disservice if the
Japanese had believed him. My hunch is that the Japanese were not taken in by the accolade.

Japan in the last fifty years has been successful economically in the league of the United States. Now that China and India have begun to embrace openness, how will Japan adjust to compete economically and culturally?

19. Notes from a Very Small Island
In a speech delivered on 19 April 04 at a meeting of the Association of American Universities (AAU), Professor Shih Choon Fong, President of the National University of Singapore (the very small island) and Chairman of the Association of Pacific Rim Countries (APRU), posed a very intriguing question to his North American
colleagues: "Will the center of higher education remain in North America or will move? (To China and India?).

He quoted a Goldman Sachs prognosis that the world in 2050 will face a tectonic change. In 2050, China and India, each with a population far exceeding 1 billion, and the United States with a population under 450 million, could be the largest economies in the world.

In another forecast by an English applied linguist, David Graddot, the English language will probably drop in prominence by 2050, ranking after Chinese, and comparable to Hindi and Arabic.

Although the United States has become the global education universe in the 20th century, China and India now poised to become two of the world's largest economies may aspire to become the new centers of learning. They will strive for cultural and technological primacy. Can they?

20. Harvard MPA
I attended the MPA course at the Graduate School of Public Administration of Harvard University in 1963. On arrival at Harvard, mid-career officers such as myself were told that while it was easy to pass, having been carefully selected by Harvard, it would be difficult to excel, as we will be among the best competing with the best.

The teaching method at Harvard was in stark contrast to the University of Malaya (NUS). The professors assumed that, as we were learning at a post-graduate level, we already know the subject matter.

I was startled at one of the first American-style lecture when the professor began the course by asking a question. The student he asked responded not with an answer, but with another question! The process was a relay of questions rather than a round of answers. Though strange at first, I soon learnt to navigate this system by thinking
of the whys rather than the hows. This is a more stimulating way of learning.

21. Open Societies
Without a doubt, the wealth of human talent in China and India can propel these countries and societies to intellectual and technological prominence if, and it’s a big, big if, they can break out of the mould of Confucian philosophy of the emperor knows best, and the Indian caste system where some are preordained to be masters and the
others slaves.

For such large countries, because of endless cycles of war and famine, stability was prized above everything else. In my view, it will take decades, if not centuries, before Chinese and Indian societies will be ready to embrace openness and risk chaos. Yet, they must.

22. Cultural DNA
In the view of Mr Robert Kuok, if we lose our Chineseness, our Malayness, and Indianness, we would have lost everything. Having only western DNA in our blood will lead us to a dead-end in an era when China and India are in the ascendant. Without cultural DNA, our best and brightest, schooled in the leading western universities, will not be stayers. They will rationalise and migrate at the slightest tremor.

Though bright Chinese and Indians also migrate, they have enough cultural DNA to leave their hearts behind. As China and India become more open societies, the best and brightest of their people will return to help build their own country.

Our size and diverse languages leave us in a no-man's land. The present adoption of English as our first language has served the economic imperative of education. But is economics the only imperative? Can national survival depend only on economics?

23. Being Monolingual
Personally, I was schooled in the English medium. English is my master language. In the world of the future, a monolingual person, such as myself, will not survive whether he is English or Chinese-educated. Indeed, in a global knowledge based economy, an individual has to be multilingual and bicultural to survive.

24. Bilingual and Bicultural
I am encouraged by recent Government announcement of plans to set up a scholarship scheme to nurture a group of Chinese students to have a deeper understanding of Chinese culture and history, so as to be able to engage China in depth. The scheme will groom 100 to 200 Chinese students in every primary school cohort yearly. This will ensure that Singapore could continue to have in depth exchanges and close relations with China.

While we await MOE's proposal on how to accomplish this, my guess is that such schooling will be at SAP plus level. This select group of students will have to study both English and Chinese at first language level.

Indeed, some friends of my generation, at the insistence of their Chinese-educated parents, attended English medium schools in the morning and Chinese medium schools in the afternoon. They were schooled in both English and Chinese at first language level. As a result, they were comfortable in both cultures.

Though it is tough to achieve, the Singaporean of the future has to be not only bilingual, but also bicultural. It will be a challenge for MOE, society and the family, to bring this about. It is a worthwhile goal. Indeed, Singapore's very survival rides on us being multilingual and bicultural.

Unlike China and India, Singapore has no other choice. MM noted that language and culture were inseparable and the Chinese elite of the new generation had to be like students from the Chinese schools in the past who not only mastered the Chinese language. but also knew the culture and history of China.

25. Singapore's Destiny
I began by postulating that the purpose of education is to serve the cultural, political and economic imperative of a society. Singapore's education system has focused almost exclusively on the economic imperative. While it is true that man does not live by bread alone, can he live without any bread at all?

26. Ideal Teaching Method
Finally, what is the ideal teaching structure? Is it to be prescriptive like Confucius or Plato? Or, interactive like Socrates? Or, divine like Christ? Learning and teaching will exercise the minds of men forever. A society that stops learning and teaching will be dead and fossilized like dictatorships.

But the worst dictatorship is dictatorship of the mind. Societies which allow themselves to be trapped by political indoctrination or religious fanaticism will ultimately self destruct. Singapore has to change and evolve, breaking out of our present mould and mindset.

27. Continuity of Policies
Whatever the endowments of a country, the one single aspect that foreign investors will not tolerate is lack of continuity in public policies, whether economic and financial, social or educational.

I recall a conversation with a senior Chinese Communist cadre in 1985 when I asked him about the Cultural Revolution. He replied with great sadness that, leaving aside the immense personal suffering of individuals, the greatest damage was the loss of a whole generation of students. In the mid-1980’s, there was a lack of mid-career cadres with the education, or the experience, to drive the development process that China was then embarking on.

With its vast population and talent base, the wounds were quickly healed. China today is on everyone’s radar screen. A tiny city state like Singapore cannot survive even a mini-cultural revolution, whether in the body politic or in education, in the schools, universities, or society at large. Yet, we must change. How?

28. The PAP and Political Stability
Continuity of policies is only possible if a country enjoys political stability. The post-independence (1965) generation, who are now young parents themselves, have taken the political stability of Singapore for granted. Without the leadership of Mr Lee Kuan Yew and his first generation founding colleagues, Singapore could well be another
sorry third world story.

The older generation of our citizens born during the war years will remember the Singapore of the 1950’s and early 1960’s, wracked by religious and racial riots, and crippled by left-wing communist inspired strikes.

The non-communist English educated leadership of the PAP fought the chauvinists, racialists, and communists on their turf, and won. It is not surprising therefore that the PAP which came into power in 1959 has won every general election since.

The political and economic prosperity wrought by the PAP Government has to be jealously guarded. In such an environment, there will be no fertile soil for the opposition to grow.

Only the PAP can defeat itself.

The greatest danger to the PAP, which has been the governing party for the last forty years, is elitism and complacency. I am glad that our new Prime Minister, Mr Lee Hsien Loong, wants to create an inclusive society, not an exclusive ruling class. Complacency sets in when the administration flies on auto-pilot.

29. Creating a Nation
As we know, the Jewish nation which is larger than the state of Israel, is bonded by the Torah, the old Testament. As a multi-racial and multi-religious society, this is not open to us. My personal belief is that to build the nation of Singapore, we have to value human life and respect the core of the person. As a Christian, I believe that God has given each one of us at least one talent. In God's eyes, there is no person who is completely stupid. Some of us may be cerebral with abstract thinking skills. Some blessed with motor skills are good practioners. Artists and great violinists are blessed with both.

So I believe that to become a nation, we as parents, teachers, siblings and friends should search hard for the talent that each child has inherently, and help him or her to grow and excel in it. In this way, we can become a people with diversity of skills and temperaments.
In time, we will evolve into a nation.

Finally, the nation of Singapore will not just be the state of Singapore. It will embrace all who have their hearts in Singapore.

[cloud]

Pardon my igorance..can you provide me the background of this guy?

[Ramcem]

Ngiam Tong Dow served in the elite Singapore Administrative Service for more than 40 years. His vision, foresight and leadership in economics and finance have helped transform Singapore into a text-book case in development economics. As a senior civil servant and "mandarin", he has worked closely with the founding political leaders of Singapore including Goh Keng Swee, the late Hon Sui Sen, and served under two Prime Ministers, Lee Kuan Yew and Goh Chok Tong. In this book, he reflects on his experiences and shares personal anecdotes and perceptive insights of the early decades of Singapore. He also boldly questions some of the policies of government and emerging trends in the country to suggest how Singapore must change to survive and thrive in the future.

[cloud]

thanks for that. it is very useful.

[Ramcem]

One common question that was asked was what points have I disagreed with Mr. Ngiam, I would say it's our context of "effective" and "efficient".

On point number 9, Mr Ngiam said, "Out of sheer necessity, we concentrated on the economic imperative in education. Efficiency, rather than effectiveness, was the name of the game."

He then went on to explain about PAP government stopping all forms of dialects in public channels. I don't really see the link between the paragraphs on efficiency and effectiveness.

I would disagree with Mr. Ngiam on government being efficient and not effective. In my reasoning, it should be the other way round. Government is effective but not efficient.

Perhaps this difference between Mr. Ngiam and myself stems from our different backgrounds. Mr. Ngiam is a bureaucart while I am a business person.

For example, the objective of this department is to solve the logistics problems faced by customers. If the problems are solved, then this department is "effective". How "efficient" the department is how much resources they need to solve the problems. Two departments can solve the same problems. One used $1m with 3 President Scholars while the other use $250k and 1 poly graduate. Which one is more "efficient"?

So if you are efficient but you are not effective, the problems still doesn't get solved.

For government, I would say they are "effective" but not "efficient". In SAF, we can establish our military objectives (read: effective). The question is at what cost (read: efficient)?

Actually I don't want the government to be "efficient". "Effective" is good enough. Why do I say that?

Many factors contribute to this statement of mine. Let's give some examples. Supposing our traffic police is so efficient, anyone who speed will be fined. Anyone who park his vehicle illegally get booked immediately. There would be many unhappy citizens.

Let's suppose again IRAS is so efficient that anyone not declaring their income properly gets charged immediately. I think many businesses will move out of Singapore.

Taking a broader sense, if government spending is so "efficient" that they get the best deal every time, the citizens will suffer. Simply because too little money flows back to the private sectors, the circulation of money slows down which will dampen the money multiplier effect. So I rather the goverment be a little "careless" with their money and spend more (read: not efficient)..

Whenever there are problems, prove your "effectiveness" first then follow by "efficiency". Don't do the other way round.

Regards,
Ramcem

[Ramcem]

SPEECH BY MR NGIAM TONG DOW AT THE NUS ECONOMICS ALUMNI FIRST ANNUAL DINNER HELD ON 8 DECEMBER 2007
AT THE POOLSIDE PAVILION, PYRAMID CLUB

-----------------------------------------------------------------------------------------------------
ECONOMICS AND ECONOMISTS IN THE PUBLIC ADMINISTRATIONN
OF SINGAPORE

When I joined the Singapore Administrative Service in 1959, all of us had read the humanities at university. George Bogaars, Head of Civil Service, read history. The two Heads who came after, Howe Yoon Chong and Sim Kee Boon, read economics. Pang Tee Pow, who succeeded Bogaars as PS (Defence), also read economics. Three out of the four heavyweights in the Service then were from the Economics Department.

Our most outstanding alumni are Singapore's first two Prime Ministers: Minister Mentor Lee Kuan Yew and Senior Minister Goh Chok Tong; and Singapore's first Finance Minister, DPM Goh Keng Swee. Across the causeway, Tun Abdul Razak, Malaysia's second Prime Minister, also read economics. Mr Tan Siew Sin, Malaysia’s second Finance Minister, was also from the Department.

As economics alumni, we can say with some pride that the founding political and administrative leadership of Singapore and Malaysia came largely from our Department. It can be said that they received what can be considered a modern classical education, a PPE education in philosophy, politics and economics. The question to ask is whether such an education equip us to lead and develop our countries?

First, let me disavow any claim that economics is a profession in the traditional sense that doctors, lawyers, accountants and architects are professionals. Professional colleagues in the Medical, Legal, Accounting and Architectural Services have to be registered to practise their professions. Registration gives the public some assurance that they have a threshold level of competency to practise their discipline, dealing as it were with "life and death" responsibilities. This exclusive right carries with it personal liability. They can be sued personally for negligence and deregistered for serious breaches.

Economists, on the other hand, cannot be sued for negligence. There is no threshold level of competence to practise economics. A BSc is as good as a PhD. Indeed, some of the best stock analysts have never heard of Adam Smith, or the Wealth of Nations, or abstract ideas such as the "invisible hand".

A non-economist friend of mine who has made a small fortune in penny stocks told me that his investment strategy was simple. When the tide is out, even jewels sink to the ocean floor. When the tide rises, even the rubbish will float. Money is to be made in the rising and the falling of the tides.

Though economists cannot be sued, they can be sacked. Even then, it depends on where you work. In the mid-1960’s, I attended an economics seminar in Baguio in the Philippine sponsored by IBM. The Chief Economist of IBM, Dr Grove, had worked in the Federal Reserve Bank. He was asked the difference in the accountability of the Fed chairman and the IBM chief economist.

As IBM's Chief Economist, he would be invited by Mr Tom Watson, founder of the Company, to lunch once a quarter. He would be asked by Mr Watson to brief him on the state of the economy. Dr Grove had to make a forecast of the number of mainframes that IBM can expect to sell in the next quarter. At each quarterly lunch, actual sales would be matched against forecasts. Dr Grove told us that whatever ego he had as an economist was completely dissipated by the actual sales numbers.

At the Fed, highly paid central bank economists would draw deeply on their pipes and pronounce with gravitas what interest rates are likely to be. They would even forecast what the GDP growth rate would be for the calendar year. Central bank forecasts of interest, exchange and GDP growth rates are soon forgotten. They make for good headlines in the morning newspaper only the day after. Unlike IBM economists, Fed economists are not held accountable for the central forecasts they make. Mr Watson had no time for Fed economics, or economists. Woe betides his chief economist if the sales forecasts are way off the mark.

As a policy outsider, it is interesting to note that our MAS eschews interest rate as a policy instrument. Instead, the MAS focuses on the exchange rate as the key instrument of monetary policy. The MAS intervenes directly in the foreign exchange markets, buying or selling the Singapore Dollar against a basket of currencies predominantly the US$. While such a policy may be effective against disruptive short-term inflows of foreign currencies, I question whether it is adequate as a long-term policy instrument?

All of us learn in Economics 101 that the underlying bedrock for growth is total factor productivity. In comparing GDP growth rates, we need to differentiate between expansion and growth. The economy expands when the labour force increases. Singapore's GDP has expanded largely on infusions of foreign labour. Secular long-term growth can only be sustained if Singapore's productivity increases. Our productivity performance has been mediocre.

MAS's catch phrase in its half yearly review is that it will allow a modest appreciation of the Singapore Dollar over time. Such a policy stance is realistic only if there is steady increase in our productivity growth. The central economic challenge for Singapore is raising productivity. At its core, productivity is a mix of efficiency and effectiveness. The key Ministry in the present phase of our economic growth is the Ministry of Education, not EDB or the MOF.

As a tribe, economists unlike poets are not given to day-dreaming. This afternoon, let me pose two philosophical questions. First, let me ask you whether the world can exist without economics. The answer in modern jargon is that it is "a no brainer". It is like asking whether mother earth Gaia can go without knowledge of medicine, engineering, or law. My second question is whether Singapore can live without economists. The answer is not so clear-cut. It all depends.

Under the strong intellectual leadership of our first Finance Minister, Dr Goh Keng Swee, the Ministry of Finance practised what became known as a robust brand of economics. Dr Goh established Singapore's Bird Park in Jurong before the Zoo at Mandai because, as he points out, bird seeds cost considerably less than meat for the tigers and the lions at the zoo. Even if the meat comes free from crippled race horses.

The Ministry of Finance also rejected flood alleviation works at the Bukit Timah Canal. As it flooded only three or four times a year, it was too costly to enable motorists to arrive home in time for dinner. We would rather give a schoolboy 50 cents bus fare to go to the beach to swim rather than have a swimming pool built at Tanjong Pagar. The cost per swim would be much higher than the bus fare.

Such a robust approach could also turn out to be myopic. In the early years, the lift at some Housing Board blocks only stopped on alternate floors. As the lift shaft went through all floors, the savings if any was marginal. Retrofitting of such lifts under HDB's current lift upgrading programme is costing much more.

In the great MRT debate of the mid-1970’s, the Ministry of Finance assembled a powerful team led by Harvard economists to argue for an all-bus rather than a bus-rail mass rapid transit system. Our own young transportation planners demonstrated through system studies that an all-bus system would tie up the whole of Singapore in grid lock.

I was then PS (Communications). Not being a transport planner, as a general economist I argued that a rail-based mass rapid transit system would provide access to the whole of Singapore. Property values would rise. The increase in the collection of property taxes would probably pay for the total cost of $5 billion to build the initial system. As it turned out, those of us in favour of the MRT won the public argument. Nothing succeeds like success. Today, the LTA is building a rail network to connect the whole of Singapore.

In public administration, the economic tool I found most useful is cost-benefit analysis. Its simplicity is disarming. In evaluating the host of projects submitted by operating ministries in the annual budget exercise, the Ministry of Finance simply totes up the capital and operating costs of the project and compare the costs with the benefits on the other side of the ledger. The devil is in the details.

For instance, should we add indirect cost such as damage to the environment on the cost side? An environmental project that reduces pollution is clearly of benefit to the community. The problem is how do we value clean air. Does its value lie in protecting the population against a high incidence of asthma? Should not the asthma sufferer pay for clean air?

Very quickly we get into the realm of welfare economics, which I found difficult to grasp as an undergraduate. Worse, the textbook prescribed was Professsor Little's classic critique of welfare economics. What I did learn from his book is that the demand curve is actually a derivative of indifference curves. Simply put, an indifference curve plots your choice of having either more oranges and less apples, or more applies and less oranges, from two baskets until you reach the point that you are indifferent to both.

In the very public debate on the proposed MRT in the mid-1970’s, Dr Goh agreed that a mass rapid transit system would add to the employment capacity of the central business district. Assuming that the MRT can bring an additional 250,000 workers into the city each morning peak, the capital cost alone to have each additional worker arrive on time for work would be $200,000, as the whole system would cost us $5 billion to build.

He asked whether an all-bus system would be cheaper and less risky to undertake as the bus fleets can expand incrementally bus by bus. It was a disruptive piece of reasoning. Those in the opposing camp argued that a rail-based system would open up almost every corner of Singapore. With access to rapid mass rail transport, new towns can be developed in every region of Singapore: north-south-east-west. The development potential would increase and land values would rise, yielding more property taxes which can finance the capital cost of the rail system. Economists call such benefits external economies. External economies generated by a less land-intensive rail-based mass rapid transit system far outweighs its high capital cost.

The alternative would have been an all-bus mass transit system. There is simply no land to build or expand roads to accommodate the thousands of buses which would be on the road each day during the morning and evening peaks. The outcome would have been severe congestion and gridlock. Congestion pricing would reach heights which would provoke a political backlash. There would also be the external diseconomy of petrol fumes and pollution. Finally, a rail-based transit system provides a strong physical backbone for integration of all transport modes, whether private cars, taxis, buses, vans or lorries.

The great MRT debate of the 1970’s is an outstanding example of cost benefit analysis in public decision-making. But not all public policies are amenable to straight cost benefit analysis. For instance, can we apply cost benefit analysis in the Great Marriage debate of the 1980’s to produce the desired outcome of more intellectually compatible marriages and birth of intelligent babies? It was a piece of social engineering that did not succeed. My guess is that it failed because there was too much cost benefit analysis. The Government targeted the purse more than the heart. Winning hearts is not for cost benefit analysis.

Cost benefit analysis can be done either on the back of a used envelope or in the bowels of super-computers. When I was appointed PS (Budget) in 1987, Dr Goh asked to see me. I thought that he wanted a bigger budget allocation for his Ministry. I was dead wrong. He told me simply that as PS (Budget), I would continue to make mistakes. Only this time, I would be making them in the bowels of super-computers instead of the backs of used envelopes, which was what I did when I was his young adjutant. This was the best piece of financial advice I believe a Minister can give to a newly minted Permanent Secretary.

In the early days, a $1 million project proposal would be put through the meat grinder by the Finance Ministry using paper and pencil. In fact, Dr Goh told us, the young Finance "aristocrats", that we should just reject out of hand any and every spending proposal received the first time. If the supplicant Ministry persists, and only on the third try, we would give them half of what they want.

These days any project proposal less than $100 million is not considered respectable. Worse, we need to have super-computers to crunch out the numbers. But I just wonder whether decisions made in the bowels of super-computers are any sounder than the old fashioned way of paper and pencil on the back of used envelopes? If our basic thinking is unsound, no super-computer can help us.

Super-computers produce effortlessly reams of statistics. Though statistics help to buttress our conclusions, Dr Goh, an outstanding statistician himself, told me that all statistics have to be subjected to reality checks.

In the early 1960’s, I accompanied the Minister to attend an ECAFE meeting in Bangkok. After dinner, the Minister insisted on an evening walk.

After sweating up and down the hot and dusty pavements of the street in front of our hotel, I plucked up enough courage to ask Dr Goh what was the purpose of the exercise. He told me that he wanted to see whether the
shops were well stocked. As they were, he was satisfied that the economic statistics put up by the Bank of Thailand, headed then by Dr Puey Umpakorn, his LSE college mate, were credible. By Dr Goh's compass, all statistics have to be checked against reality. Particularly GDP estimates. More so in Singapore when civil service annual bonuses are tied to GDP growth rates.

Another lesson I learnt in statistics was from Dr Albert Winsemius, our Economic Advisor in the 1960’s and 1970’s. One figure that he watched like a hawk was our unemployment rate. In the early days we did not have the resources to do labour force surveys on a regular basis. Instead, he asked us to subscribe to the Straits Times to be delivered to him by airmail in the Hague where he lived.

When I asked him what he found so interesting in the Straits Times which was after all a parochial Singapore newspaper, he said that he did not read the Straits Times for world news. As our Economic Advisor, he was more interested in the density of the jobs vacancies columns. He got his young grandson to plot the changes. He told me that the chart his grandson produced told him far more about the state of the Singapore economy than all the economic statistics I dutifully sent him each month. So back of the envelope calculations can sometimes be more useful than a super-computer.

In the mid-1950’s, when my generation was at university, we were taught the neo-classical economics of Marshall and Keynes, with Adam Smith as the foundational anchor of the "dismal science". Currently, there is an intellectual debate between mainstream neo-classical economists and dissidents who are "heterodox", whatever that means.

An article by Patricia Cohen in BT (13 July 2007) had this headline: "Economists ready to critique basic models”. The sub-text was that the discipline is being taken to task for relying on abstract theories instead of analysis. The debate is still raging, and it is not very clear to me where is the dividing, or defining line.

To me it sounds very much like what my Permanent Secretary and Minister, Mr Hon Sui Sen, told me when I asked him to define banking. Mr Hon was the founding chairman of DBS Bank. Being himself a first class graduate in physics from Raffles College, he said that banking was both a science and an art.

I would like to think that economics falls in the same genre. Instinctively, we can accept Adam Smith's "invisible hand". Even more abstract is the holy grail of economics, namely equilibrium. A French statistician and mathematician was awarded the Nobel Prize in Economics for what he himself acknowledged was only a partial (mathematical) proof of equilibrium.

So where do I stand as a bureaucratic practitioner of economics? Philosophically, I would take the same stance as Deng Xiaoping who advised his doctrinaire CCP party comrades to "seek truth from facts", and "not fit facts to truth". Or, as Dr Goh would tell us when he sends down his draft Budget speech for us to check "If the facts are wrong, we can change the conclusion”.

Looking at the facts has enabled us to practise what Professor Schein in his book on Singapore called Strategic Pragmatism. Singapore's growth has not been circumscribed by doctrine or dogma.

Yet, looking at the facts alone may not be enough. By 1972, after 7 years of an export-led economic policy spearheaded by American, European and Japanese multinational manufacturing companies, Singapore virtually achieved full employment with an unemployment rate of under 3%, which holds true today. Job-hopping, a phenomenon of full employment, reared its ugly head.

Yet, we pressed on with the juggernaut of the "Stop at 2" family planning policy. Our policy-makers failed to draw the right conclusion from the falling birth rates. Some of us who had doubts about the prevailing policy surmised that as more and more housewives went out to work, they would have less time to have children.

I fear that the tipping point of procreation has been reached. Falling birth rates cannot be easily reversed. Today, we may be in danger of being wrong in the opposite direction. The URA, for purely physical planning purposes, has set an ultimate population target of 6.5 million people.

It is true that in the late 1960’s, those of us in EDB did some back of the envelope calculations and concluded that the optimum population size should be around 5-6 million people, similar to the population of successful medium-size industrial countries, such as Switzerland, Sweden, Norway and Israel. But such optimum population sizes were based on the technology-labour ratios of those years. To put it another way, we now need less workers to produce $1 million GDP than before. But these workers have to be better educated and better trained. They have to be technology savvy.

The Civil Service is more adept at achieving quantitative than qualitative targets. Topping up our population en masse with immigrants may well create a population base larger than what our economy can sustain. Paradoxically, we may yet regress back to unemployment. Unlike our earlier policy of admitting more work permit workers to meet cyclical demand for labour, immigrants once given permanent residence are here to stay. I confess that I am not clued up enough to have a complete understanding of what our current population policy is.

To me, population is the most pressing social, economic and political policy issue. Our best brains should be mobilised to think through its many facets. The best administrators should be tasked to coordinate and implement what has to be a coherent multi-dimensional long-range policy.

Lord Keynes, who many of us would regard as the father of modern economics, wrote in the preface to his epochal work "The General Theory", a sentence which intrigued me as a student. He said that even the greatest of statesmen were often slaves to some defunct philosopher. The equivalent of worldly philosophers by which name economists were known during the days of Adam Smith would be the governors of the world's central banks. The Governor of the Bank of England was primus inter pares among central bank governors when Britannia ruled the waves. Today, the Chairman of the US Federal Board of Governors acts as the world's central banker.

The aim of every central bank is to achieve growth without inflation. The main policy tool used is the interest rate at which central banks would lend to commercial banks when liquidity is scarce. Currently, because of the sub-prime loans catastrophe, banks find it difficult to refinance their commercial papers, particularly collateralised debt obligations (CDOs).

At first glance, this may appear no different from Keynes prescription of running a budget deficit to kick-start an idle economy. In the 1930’s Great Depression, there were real assets of men and machines lying idle waiting to be employed. Whether or not Keynesian pump priming kick-started an idling economy is a moot point, as the onset of the Second World War brought about inflationary demand, the opposite of recession. The immediate problem was solved. The outcome was the Second World War.

Today, the world faces a more insidious problem: stagflation, which is stagnation mixed with inflation in one deadly cocktail. Credit is scarce so interest rates will rise. Individual entrepreneurs and corporations will hesitate to borrow to increase their production capacity. With fewer borrowers, interest rates will decline, and in time the production process leading to creation of real wealth will start all over again.

In between, property values will nose-dive and stocks and other financial assets will take what hardened bankers call “hair cuts”. But the real world of production and trade will continue to function intact with new technology and knowledge, coming on stream out of our research laboratories and human ingenuity. So I ask myself: Is there a new General Theory for recovery from financial excesses? In fact, Dr Goh does not consider Keynes as a General Theory. He thinks that at best it is a specific policy to overcome a general lack of consumer confidence.

Unfortunately, profligate governments have abused Keynes prescription of deficit budgeting to ruin their economies, starting with the depreciation of their currencies.

At the risk of being condemned as heretic, even lunatic, I would think that corrupt governments be put on a strict health regime starting with suspension of World Bank loans and other international credit. Similarly, big banks and investment houses which sin should be allowed to go to the wall. My only regret is that honest savers will, as in all of history, carry the main burden of ineptitude by banks and other institutions.

Should central banks provide some protection for the innocent by scrutinising all financial products and commercial papers before they are sold to an unsuspecting and gullible public? In saying this, I have moved away from pure economics. While my faith in the invisible hand remains unshaken, I believe that when the rules of the market place are tilted against the weak and the innocent, there is a case for regulatory intervention. I believe Adam Smith will not disagree.

In the late 19th and early 20th century, thousands of hungry able bodied young men from China and India arrived on the shores of Nanyang, namely Malaya, Singapore, Java and Sumatra. Hardly with a shirt on their back and little education, they toiled in the heat of the tropical sun. A few made good and became the legends of their time. My question is whether these young men can succeed today just on sheer grit and native cunning?

The 21st century is a knowledge-based globalised world of competition. The question to ask is what sort of education should today's cohort of young men and women have to succeed in life? Should it be in the hard sciences or the liberal arts? Or music and dance? And so on.

Traditionally, educated middle-class parents would want their children to study medicine, law, engineering or accountancy, simply because these disciplines allow those qualified to practise their professions. These professions by and large provide a comfortable living in most societies. But can you become spectacularly rich? To be truly rich, you will have to compete in the world of business in free enterprise economies, such as Singapore.

So I go back to the nub of my prognostication. What sort of education best prepares you for business. My personal answer is to do a double E degree, ie engineering and economics. Why economics? At the risk of being dismissed as a super egotist, I would say that while engineering teaches you how to count and measure, economics teaches you how to calculate risks and rewards.

Engineering is a quantitative science founded on the laws of physics. Economics has a body of theory, but more abstract and ambiguous. I believe that engineering and economics, E&E best prepares you for a business career, but does not guarantee success.

I will end with a "parable" told to me by one of my mentors, Dr Albert Winsemius, Singapore's first and, to me, only Economic Advisor. He said that General Bulmoose of Lil Abner cartoon fame, woke up one morning and decided that he should hire a bright young man to be his aide-de-camp in business. General Bulmoose is the cartoon caricature of mighty General Motors in real life.

Three young men were selected by the HR department for interview by the man himself. The first was an engineer. When he was asked what 1 and 1 adds up to, it was a no brainer for the quantitative engineer. The answer was obviously 2. When the accountant was asked the same question, being more creative, he said that 1 and 1 looks like 11. When it came to the economist's turn, the young man was at a loss to give a numerical answer. So he plucked up his courage and asked General (GM) Bulmoose, "Sir, what answer do you want?"

So when the American President asked the Fed Chairman for financial advice, such as the current sub-prime mortgage loans crisis, he can do no better than to heed Keyne's swipe that even the greatest of statesman may find himself the slave of some defunct philosopher. Or worse, the quick wit of the young economist, "Sir, what answer do you want?" The nimbleness of mind of the economist combined with the structured logic of the engineer will I believe give you better odds for success in business.

[dennis]

long time no see ramcem!

[alenachka]

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[makssemenovs]

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