Capitalism with Chinese Characteristics: Entrepreneurship and the State
Reviewed by Hugo Restall
Posted April 3, 2009
Beijing has responded to the global financial crisis with a $586 billion stimulus package skewed toward large-scale infrastructure projects, while also directing state-owned banks to extend credit to state-owned enterprises. The net effect will be to double down on an already investment-dependent, state-directed economy; some analysts predict fixed-capital investment will soon pass 50% of GDP.
CapitalismIf Yasheng Huang, a professor at MIT’s Sloan School of Management, is right, this will hurt China in the long run. He argues that by encouraging a high savings rate and channeling this capital to urban enterprises, the government has destroyed the rural entrepreneurship that initially lifted hundreds of millions out of poverty. Financial liberalization, deregulation and political reform are the keys to rebalancing the Chinese economy toward greater domestic consumption.
Some history is necessary to understand where Mr. Huang is coming from. After Deng Xiaoping rolled back Maoism, which diverted resources from the countryside in order promote heavy industry in the cities, rural residents were the first to benefit. Deng broke up the collective farms and allowed farmers to manage their own plots, leading to a surge in agricultural productivity. But the story doesn’t end there. In the 1980s, farmers also started small-scale manufacturing and service businesses, supplementing their incomes. Banks provided financing for these township and village enterprises, which were officially collectively owned but in fact were owned and run by entrepreneurs.
Around 1990, however, a new generation of technocratic leaders came to power and China changed its growth model. The central government embarked on industrial policy on a grand scale, again emphasizing urban industrialization. Shanghai, which was relatively neglected in the 1980s, came to the fore, along with other coastal cities. Rural access to credit dried up, and the TVEs faded away. Farmers migrated to the coast to find factory jobs.
The results were deceptive. Growth in GDP continued to be strong, so observers both within China and around the world hailed an economic “miracle.” Meanwhile growth in household income was slowing. This gap between GDP and income growth reflects the increasing share of wealth controlled by the government and the politically well-connected corporate elite, rather than workers and entrepreneurs.
Over the course of the 1990s, income inequality soared, social mobility slowed, and the health and education systems deteriorated. Property rights never enjoyed legal protection, but at least during the 1980s there was confidence that the reform trend was moving in favor of greater protection; over the last two decades, however, this reversed and corrupt local officials began to expropriate land and otherwise engage in rent-seeking activity.
Mr. Huang’s forte is explaining why China’s apparent strengths are actually symptoms of weakness. His last book, Selling China: Foreign Direct Investment in the Reform Era (Cambridge, 2003) showed that the 1990s explosion in foreign direct investment reflected the difficulty businesses have in working around the impediments government places in their way. The private sector may be the most efficient and fastest growing sector of the economy, but it is hampered by regulations and lack of access to lending from the state-owned banks. So entrepreneurs turn to foreign partners—whether real or created out of Chinese capital that is moved abroad and then brought back.
Likewise, China’s incredibly high savings rate is frequently attributed to the frugality of the Chinese people. Sometimes it is lamented that the rate is too high, which is supposedly due to the lack of a social safety net causing households to hold onto their income. In fact, Mr. Huang notes that Chinese households save less than their Indian counterparts; it is government and the corporate sector savings that turns China into a savings superpower. This suggests that consumption would increase if household income were to rise in line with GDP.
Could China go back to the 1980s model? In fact, one part of China never abandoned it. Zhejiang province, with its famously hard-driving business cities of Ningbo and Wenzhou, continued to encourage the development of private business through the 1990s. That makes it the perfect case study to juxtapose against neighboring Jiangsu province, which started out at the same level of development in 1990 but then followed the state-led, FDI-dependent approach. Zhejiang has pulled ahead not only in per capita income, but in a host of other social welfare measures.
More efficient allocation of capital is the key. During the 1980s, the Agricultural Bank of China and rural credit cooperatives villages lent freely to rural nonagricultural businesses, but in the 1990s state-directed credit went to agriculture in the countryside and industry in the cities. Another hallmark of the 1980s was the creation of “rural cooperative foundations,” essentially village banks that sold ownership shares and used the share capital to make loans. These and other informal banking institutions were stamped out in the 1990s, except in Zhejiang.
Comparisons like that between Zhejiang and Jiangsu are crucial because Chinese statistics are notoriously unreliable. Even tracking the relative performance of government-owned and private companies is impossible; plenty of companies that are nominally private are actually public, and vice versa. Mr. Huang uses more reliable data series like household surveys to tease out the truth. But in many cases he simply has to present a hypothesis and admit that the evidence to prove it does not exist.
This problem means that trying to characterize the post-1990 Chinese development strategy is a bit of a Rorschach Test. Conventional wisdom classifies it as a variant of the East Asian model pioneered by Japan. Other economists have hailed it as a new model that shows neoliberal prescriptions are misguided. After all, China seems to have succeeded without building a rule of law, property rights, democracy, the free flow of information and capital, etc. Economists have constructed elaborate models to show how this is possible.
Mr. Huang disagrees with both these views, essentially saying that to the extent reform succeeded in China it was due to an early “big bang” of laissez faire liberalization in the countryside, followed by a descent into Latin America-style crony capitalism. The good news is that over the last five years, under Communist Party General Secretary Hu Jintao and Premier Wen Jiabao, Beijing has focused on raising rural incomes. The bad news is that the policies designed to achieve this goal are still top-down administrative measures.
That isn’t surprising, since the Hu-Wen generation still comes from the same Soviet-style technocratic background as their predecessors. The financial crisis only makes it more difficult for them to trust that a liberalized banking sector can deliver growth. Perhaps China will have to wait for new leaders to come forward with the same breadth of vision and confidence in the Chinese people as Deng Xiaoping, Hu Yaobang and Zhao Ziyang, the progenitors of the 1980s renaissance. One can only hope that those future leaders are reading Mr. Huang’s work.
http://forums.delphiforums.com/sunkopitiam/messages?msg=26728.1
Friday, April 3, 2009
Shadow Cabinet, When?
Shadow Cabinet, When?
Gerald Giam brought this up about Gregory Hunt, a Shadow Minister for Climate Change, Environment and Urban Water from Australia who is visiting Singapore. Unfortunately for Singapore, there is not enough opposition in parliament to create a real shadow cabinet to rightly or wrongly challenge the existing policies of the various ministries. There are only 2 opposition MPs and one opposition NCMP, the consolation parliamentary prize given to the opposition. Why is this so? Simply because citizens did not vote in enough opposition.
Something else about our Westminster parliamentary roots that did not take root in Singapore. The quaint gracious official title of the opposition in the UK i.e. the losers of the last election, is “Her Majesty’s Loyal Opposition”. The word “Loyal” is to remind parliament and the people that the opposition’s cabinet is a shadow one, not a shadowy one. This is also something that the PAP should drum into their heads.
http://forums.delphiforums.com/sunkopitiam/messages?msg=26061.1
Gerald Giam brought this up about Gregory Hunt, a Shadow Minister for Climate Change, Environment and Urban Water from Australia who is visiting Singapore. Unfortunately for Singapore, there is not enough opposition in parliament to create a real shadow cabinet to rightly or wrongly challenge the existing policies of the various ministries. There are only 2 opposition MPs and one opposition NCMP, the consolation parliamentary prize given to the opposition. Why is this so? Simply because citizens did not vote in enough opposition.
Something else about our Westminster parliamentary roots that did not take root in Singapore. The quaint gracious official title of the opposition in the UK i.e. the losers of the last election, is “Her Majesty’s Loyal Opposition”. The word “Loyal” is to remind parliament and the people that the opposition’s cabinet is a shadow one, not a shadowy one. This is also something that the PAP should drum into their heads.
http://forums.delphiforums.com/sunkopitiam/messages?msg=26061.1
How will they respond?
How will they respond?
Although there was mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets, plans to name and shame international tax havens ended in a diplomatic fudge. Group of 20 countries leaders agreed to publish a blacklist of countries refusing to sign up to financial anti-secrecy rules but after frantic negotiations only four were included – none of them regarded as major tax shelters. The rest of the 'tax havens' came under another list - The Grey List.
Singapore is included in this 'grey list' countries which includes traditional tax havens – such as Monaco and Gibraltar – which have signed up to, but not implemented, key standards of tax and banking openness. World Leaders agreed that even those on the 'grey list' would face ‘sanctions’ if they refused to comply with regulations being drawn up. The punishments would include cutting aid and increasing costs for those who bank in them.
The international standard for information exchange and reflected in the UN Model Tax Convention was endorsed by the Group of 20 countries in 2004. But some countries fearing a crackdown on tax evaders stashing their money abroad, only committed to the internationally agreed tax standards weeks before the Group of 20 summit. Matti Kohonen of the London-based Tax Justice Network, which campaigns against tax loopholes for rich individuals and corporations, noted that in the two weeks leading up to the G-20 meeting in London a number of tax havens signed up to new banking agreements in hopes of avoiding being listed as uncooperative.
Singapore only committed to the internationally agreed tax standard in 2009, probably just weeks before the Group of 20 summit; and unlike countries like Brunei which also committed to the internationally agreed tax standard in 2009 but has since than have made 5 agreements towards implementing the internationally agreed tax standards, Singapore has not made any such agreements.
What would be even more interesting to note would be how the government of Singapore responds to being placed in the 'grey list'? Is it going to criticise the way the lists were drawn up, sulking perhaps that several US states with tax-friendly laws, like Delaware, Nevada and Wyoming, were not put on either list while Singapore was. Or is it going to respond like Monaco, whose Minister of State (equivalent of Prime Minister of the principality) Jean-Paul Proust said, "We are on the right track. We hope to be able to definitively leave the grey list towards the end of the year"?
http://forums.delphiforums.com/sunkopitiam/messages?msg=26058.1
Although there was mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets, plans to name and shame international tax havens ended in a diplomatic fudge. Group of 20 countries leaders agreed to publish a blacklist of countries refusing to sign up to financial anti-secrecy rules but after frantic negotiations only four were included – none of them regarded as major tax shelters. The rest of the 'tax havens' came under another list - The Grey List.
Singapore is included in this 'grey list' countries which includes traditional tax havens – such as Monaco and Gibraltar – which have signed up to, but not implemented, key standards of tax and banking openness. World Leaders agreed that even those on the 'grey list' would face ‘sanctions’ if they refused to comply with regulations being drawn up. The punishments would include cutting aid and increasing costs for those who bank in them.
The international standard for information exchange and reflected in the UN Model Tax Convention was endorsed by the Group of 20 countries in 2004. But some countries fearing a crackdown on tax evaders stashing their money abroad, only committed to the internationally agreed tax standards weeks before the Group of 20 summit. Matti Kohonen of the London-based Tax Justice Network, which campaigns against tax loopholes for rich individuals and corporations, noted that in the two weeks leading up to the G-20 meeting in London a number of tax havens signed up to new banking agreements in hopes of avoiding being listed as uncooperative.
Singapore only committed to the internationally agreed tax standard in 2009, probably just weeks before the Group of 20 summit; and unlike countries like Brunei which also committed to the internationally agreed tax standard in 2009 but has since than have made 5 agreements towards implementing the internationally agreed tax standards, Singapore has not made any such agreements.
What would be even more interesting to note would be how the government of Singapore responds to being placed in the 'grey list'? Is it going to criticise the way the lists were drawn up, sulking perhaps that several US states with tax-friendly laws, like Delaware, Nevada and Wyoming, were not put on either list while Singapore was. Or is it going to respond like Monaco, whose Minister of State (equivalent of Prime Minister of the principality) Jean-Paul Proust said, "We are on the right track. We hope to be able to definitively leave the grey list towards the end of the year"?
http://forums.delphiforums.com/sunkopitiam/messages?msg=26058.1
Unemployed PMETs Situation : Bad to worse
Unemployed PMETs Situation : Bad to worse......
PMET is an abbreviation for professionals, managers, executives and technicians. The employment prospects for a PMET above 40 is poor during the good times....and worse than poor during the bad times. During the good times, the govt coined this euphemistic term "structural unemployment" to describe the problem. The proposed govt solution has been the same in good times and bad- retraining, retraining, retraining. When retraining does not work, what does the govt propose? More retraining. Right now the govt is proposing to have more 40 conversion schemes for PMETs [Link]. Do you think they will solve the problem if they have 100 conversion schemes?...make that 200. The problem is not the skills but the age of these people and the ability of employers to practice age discrimination a.k.a ageism.
Why did employers take in those over-40s in the past...say 15 years ago? The reason is very simple. Singapore had a rather tight labor market so when the economy boomed employers couldn't find workers ddn't have much of a choice except to give those who were older a chance. The booming economy created opportunities for these people. When the recession came, they had as good a chance as anyone else of getting retrenched. If they became jobless, they had to struggle until the economy recovered before they got another shot at decent employment.....but that was the situation 15 years ago. What has changed?
When the PAP govt opened the floodgates for foreign workers, they also changed the demographics of our workforce. The supply of workers below the age of 30 became almost unlimited, given you can always find workers from India and China willing to come here. When the economy boomed in 2007/2008 the employers could employ hundreds of thousands of foreign workers. Instead of the labor market becoming tight creating opportunities for those over-40s, the influx of workers caused this group of Singaporeans to remained unemployed or underemployed during the boom.
% increase in employment (residents vs foreigners)
Chart taken from Online Citizen.[Link]
If the goal of the PAP govt simply wanted grow the GDP as fast as possible, it is easy to understand what they were trying to do. The huge influx of foreign workers caused the cost of living (e.g. rentals) to rise and the rapid growth of the economy caused it to overheat[Link : Singapore economy shows sign of overheating as companies hire workers at an unprecedented pace] .
The PAP continues to insist that its economic model is the best for ordinary Singaporeans but ordinary Singaporeans are beginning to ask : What's in it for us? Being forced to work until our old age burdened by the highest household debt in Asia while becoming increasing unemployable after the age of 40...is that something that we want for ourselves and our children? The wealth from this GDP growth distributed inequitably as the system results in an income gap comparable only to 3rd world nations.
http://forums.delphiforums.com/sunkopitiam/messages?msg=25886.1
PAP politicians say the darndest things
Here is a list of quotations by local politicians. There may exist misquotations, after all the source is an email.
“Right now we have Low Thia Khiang, Chiam See Tong, Steve Chia. We can deal with them. Suppose you had 10, 15, 20 opposition members in Parliament. Instead of spending my time thinking what is the right policy for Singapore, I’m going to spend all my time thinking what’s the right way to fix them, to buy my supporters votes, how can I solve this week’s problem and forget about next year’s challenges?”
Lee Hsien Loong, 3 May 2006.
“…you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would lose money by the billions!”
Lee Kuan Yew said on April 2007
“For a person who runs a million-dollar charitable organisation, $600,000 is peanuts as it has a few hundred millions in reserves.”
Mrs Goh Chok Tong
“If you don’t include your women graduates in your breeding pool and leave them on the shelf, you would end up a more stupid society… So what happens? There will be less bright people to support dumb people in the next generation. That’s a problem.”
Lee Kuan Yew in 1983
“Only 5% are unemployed. We still have 95% who are employed.”
Yeo Cheow Tong
“Retrenchment is good for Singapore. If there is no retrenchments, then I worry.”
Goh Chok Tong
“We must encourage those who earn less than $200 per month and cannot afford to nurture and educate many children never to have more than two… We will regret the time lost if we do not now take the first tentative steps towards correcting a trend which can leave our society with a large number of the physically, intellecually and culturally anaemic.”
Lee Kuan Yew in 1967
“Contrary to public perception, the White Horse classification is not to ensure that sons of influential men gets preferential treatment. Instead it is to ensure that they do not get preferential treatment.”
Cedric Foo
“No, it was not a U-turn, and neither was it a reversal of government policy. But you can call it a rethink.”
Yeo Cheow Tong
“I give you an example: you put out a fun podcast, you talk about”bak chor mee’; I will say “mee siam mai hum”, then we compete.”
Lee Hsien Loong
“I don’t think that there should be a cap on the number of directorship that a person can hold.”
PAP MP John Chen who holds 8 directorships
“It’s not for the money because some of the companies pay me as little as $10,000 a year.”
PAP MP Wang Kai Yuen who holds 11 directorships.
“We started off with (the name) and after looking at everything, the name that really tugged at the heartstrings was in front of us. The name itself is not new, but what has been used informally so far has endeared itself to all parties.”
Mah Bow Tan on the $400,000 exercise to rename Marina Bay as Marina Bay.
“Having enjoyed football as a national sport for decades, we in Singapore have set ourselves the target of reaching the final rounds of World Cup in 2010.”
Ho Peng Kee
“I would want to form an alternative policies group in Parliament, comprising 20 PAP MPs. These 20 PAP MPs will be free to vote in accordance with what they think of a particular policy. In other words, the whip for them will be lifted. This is not playing politics, this is something which I think is worthwhile doing.”
Goh Chok Tong
“If you want to dance on a bar top, some of us will fall off the bar top. Some people will die as a result of liberalising bar top dancing - a young girl with a short skirt dancing on it may attract some insults from some other men, the boyfriend will start fighting and some people will die.”
Vivian Balakrishnan, Minister for Community Development, Youth and Sports
“People support CPF cuts because there are no protest outside Parliament.”
Lee Hsien Loong
“Save on one hairdo and use the money for breast screening.”
Lim Hng Kiang
“Singaporean workers have become more expensive than those in the USA and Australia.”
Tony Tan
“I regret making the decision because, in the end, the baby continued to be in intensive care, and KKH now runs up a total bill of more than $300,000″
Lim Hng Kiang, regretting the decision to save a baby’s life because KKH ran up a $300,000 bill
“Without the elected president and if there is a freak result, within two or three years, the army would have to come in and stop it.”
Lee Kuan Yew
“Please do not assume that you can change governments. Young people don’t understand this”
Minister Mentor Lee Kuan Yew, post-2006 General Elections
“How much do you want? Do you want three meals in a hawker centre, food court or restaurant?”
Dr Vivian Balakrishnan
“People could buy frozen food instead of more expensive fresh food… They could opt for house brand goods, which cost less than others..”
Lee Hsien Loong
“Based on figures provided by ComfortDelGro, Singapore’s biggest taxi operator, cabbies are pocketing about $11 more a day, earning about $318.”
Mr. Raymond Lim
“GST hike is to help the poor.”
Lee Hsien Loong
“I mean, we are different. This was a lapse, what to do, it’s happened.”
Lee Hsien Loong
“You know, the cure for all this talk is really a good dose of incompetent government. You get that alternative and you’ll never put Singapore together again: Humpty Dumpty cannot be put together again…and your asset values will be in peril, your security will be at risk and our women will become maids in other people’s countries, foreign workers.”http://www.blogger.com/post-create.g?blogID=1472917456130506076
Lee Kuan Yew - Justifying pay hikes for Singapore ministers, The Straits Times, 5 April 2007
“This should never have happened. I am sorry that it has.”
Wong Kan Seng
“Every month, when I receive my CPF statement, I feel so rich and the best part is, I know the CPF money won’t run away. CPF will still be around for a long, long time to come. Not only is it earning good interest, my capital is protected.”
Lim Swee Say
http://forums.delphiforums.com/sunkopitiam/messages?msg=25928.1
“Right now we have Low Thia Khiang, Chiam See Tong, Steve Chia. We can deal with them. Suppose you had 10, 15, 20 opposition members in Parliament. Instead of spending my time thinking what is the right policy for Singapore, I’m going to spend all my time thinking what’s the right way to fix them, to buy my supporters votes, how can I solve this week’s problem and forget about next year’s challenges?”
Lee Hsien Loong, 3 May 2006.
“…you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would lose money by the billions!”
Lee Kuan Yew said on April 2007
“For a person who runs a million-dollar charitable organisation, $600,000 is peanuts as it has a few hundred millions in reserves.”
Mrs Goh Chok Tong
“If you don’t include your women graduates in your breeding pool and leave them on the shelf, you would end up a more stupid society… So what happens? There will be less bright people to support dumb people in the next generation. That’s a problem.”
Lee Kuan Yew in 1983
“Only 5% are unemployed. We still have 95% who are employed.”
Yeo Cheow Tong
“Retrenchment is good for Singapore. If there is no retrenchments, then I worry.”
Goh Chok Tong
“We must encourage those who earn less than $200 per month and cannot afford to nurture and educate many children never to have more than two… We will regret the time lost if we do not now take the first tentative steps towards correcting a trend which can leave our society with a large number of the physically, intellecually and culturally anaemic.”
Lee Kuan Yew in 1967
“Contrary to public perception, the White Horse classification is not to ensure that sons of influential men gets preferential treatment. Instead it is to ensure that they do not get preferential treatment.”
Cedric Foo
“No, it was not a U-turn, and neither was it a reversal of government policy. But you can call it a rethink.”
Yeo Cheow Tong
“I give you an example: you put out a fun podcast, you talk about”bak chor mee’; I will say “mee siam mai hum”, then we compete.”
Lee Hsien Loong
“I don’t think that there should be a cap on the number of directorship that a person can hold.”
PAP MP John Chen who holds 8 directorships
“It’s not for the money because some of the companies pay me as little as $10,000 a year.”
PAP MP Wang Kai Yuen who holds 11 directorships.
“We started off with (the name) and after looking at everything, the name that really tugged at the heartstrings was in front of us. The name itself is not new, but what has been used informally so far has endeared itself to all parties.”
Mah Bow Tan on the $400,000 exercise to rename Marina Bay as Marina Bay.
“Having enjoyed football as a national sport for decades, we in Singapore have set ourselves the target of reaching the final rounds of World Cup in 2010.”
Ho Peng Kee
“I would want to form an alternative policies group in Parliament, comprising 20 PAP MPs. These 20 PAP MPs will be free to vote in accordance with what they think of a particular policy. In other words, the whip for them will be lifted. This is not playing politics, this is something which I think is worthwhile doing.”
Goh Chok Tong
“If you want to dance on a bar top, some of us will fall off the bar top. Some people will die as a result of liberalising bar top dancing - a young girl with a short skirt dancing on it may attract some insults from some other men, the boyfriend will start fighting and some people will die.”
Vivian Balakrishnan, Minister for Community Development, Youth and Sports
“People support CPF cuts because there are no protest outside Parliament.”
Lee Hsien Loong
“Save on one hairdo and use the money for breast screening.”
Lim Hng Kiang
“Singaporean workers have become more expensive than those in the USA and Australia.”
Tony Tan
“I regret making the decision because, in the end, the baby continued to be in intensive care, and KKH now runs up a total bill of more than $300,000″
Lim Hng Kiang, regretting the decision to save a baby’s life because KKH ran up a $300,000 bill
“Without the elected president and if there is a freak result, within two or three years, the army would have to come in and stop it.”
Lee Kuan Yew
“Please do not assume that you can change governments. Young people don’t understand this”
Minister Mentor Lee Kuan Yew, post-2006 General Elections
“How much do you want? Do you want three meals in a hawker centre, food court or restaurant?”
Dr Vivian Balakrishnan
“People could buy frozen food instead of more expensive fresh food… They could opt for house brand goods, which cost less than others..”
Lee Hsien Loong
“Based on figures provided by ComfortDelGro, Singapore’s biggest taxi operator, cabbies are pocketing about $11 more a day, earning about $318.”
Mr. Raymond Lim
“GST hike is to help the poor.”
Lee Hsien Loong
“I mean, we are different. This was a lapse, what to do, it’s happened.”
Lee Hsien Loong
“You know, the cure for all this talk is really a good dose of incompetent government. You get that alternative and you’ll never put Singapore together again: Humpty Dumpty cannot be put together again…and your asset values will be in peril, your security will be at risk and our women will become maids in other people’s countries, foreign workers.”http://www.blogger.com/post-create.g?blogID=1472917456130506076
Lee Kuan Yew - Justifying pay hikes for Singapore ministers, The Straits Times, 5 April 2007
“This should never have happened. I am sorry that it has.”
Wong Kan Seng
“Every month, when I receive my CPF statement, I feel so rich and the best part is, I know the CPF money won’t run away. CPF will still be around for a long, long time to come. Not only is it earning good interest, my capital is protected.”
Lim Swee Say
http://forums.delphiforums.com/sunkopitiam/messages?msg=25928.1
4 tax havens blacklisted
April 3, 2009
4 tax havens blacklisted
Singapore is placed on the 'grey list', along with Switzerland
 |  | 'We have agreed that there will be an end to tax havens that do not transfer information upon request,' said British Prime Minister Gordon Brown at the end of the G20 summit. -- PHOTO: AGENCE FRANCE-PRESSE |
LONDON - FOUR nations were blacklisted as uncooperative tax havens on Thursday after G-20 leaders declared the age of banking secrecy was over and said they would no longer tolerate shady havens draining away badly needed tax revenue.
At the request of the Group of 20 summit of rich and developing nations, the Organisation for Economic Cooperation and Development named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.
Leaders also said nations that refuse to exchange tax information could in the future face tough sanctions - including the withdrawal of financing by the World Bank or International Monetary Fund. 'The time of banking secrecy has passed,' French President Nicholas Sarkozy said following the summit. 'Everyone around the table wants an end to tax havens. Everyone knows we need sanctions.'
The announcement reflects mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets. Anti-poverty activists say such places provide corrupt officials places to stash illicit funds, often depriving poor nations of needed resources.
The OECD has divided countries into three categories: those who comply with rules on sharing tax information, those who say they will but have yet to act and nations which have not yet agreed to change banking secrecy practices.
Switzerland and Liechtenstein, which both have strong banking secrecy traditions, said last month they would adopt international rules on tax cooperation and were ready to comply with G-20 demands. Liechtenstein, Switzerland's tiny Alpine neighbour, said it has already met with British officials to prepare for the new standards. Monaco said earlier that it would be more transparent with foreign tax authorities.
In return they were spared the fate of being blacklisted but were left in a gray area of countries that still have to implement their commitment to accept new information-exchange standards.
The other on the grey list include Belgium, Brunei, Chile, the Dutch Antilles, Gibraltar, Liechtenstein, Luxembourg, Monaco, Singapore and Carribean island nations including the Bahamas, Bermuda and the Cayman Islands.
A third list of the countries named those that had substantially implemented the internationally agreed tax standard. It included Britain, China (with the exception of special administrative regions), France, Germany, Russia and the United States. -- AP, AFP
http://forums.delphiforums.com/sunkopitiam/messages?msg=25811.1
Email to Philip Jeyaretnam
Dear Philip
I have just finished reading from cover to cover the book, Make It Right for Singapore, written by your father.
I now feel as if he had risen from the grave and gave me a couple of good slaps on my face. I thought you should know this.
Mr J B Jeyaretnam is not someone that I do not recognise. I saw him a couple of times outside MRT stations, waving perhaps the book that I have just finished reading, and screaming at the top of his voice things that I could not remember.
Naturally, I scurried hastily away from him. Having fed all these years with stuff from The Straits Times, I thought it was smart of me not to go near this man or risk being associated with the guy who was trying to hold on to his dear pant as he contested one defamation suit after another (I am writing this as a figure of speech, and I do not mean Mr Jeyaretnam was not properly attired. I am being extra careful here since I am dealing with a Senior Counsel).
I have now read his book of speeches. I thought it would have been better that he pulled me aside then and told me, “Look punk, read my damn book.” I could have then read the book and perhaps found a way to offer him some kind of help. On the other hand, I could have been a coward and just scoot off faster. But Mr Jeyaretnam might not have cornered me in the first place, because perhaps he belonged to a certain breed of gentlemen who would never want to stuff things down others’ throats, unlike the way things are done by some others that we know. Anyway, there is no merit for speculation. It is all water under the bridge now.
Back to you dad’s book. As I said, I finally have the chance to read it, thanks to a friend who gave the book to me. And this is what is going on in my mind right now.
Mr Jeyaretnam must have felt terribly lonely all those times, as he spoke one man against the rest in Singapore Parliament, to advocate for more transparency and accountability on the part of the government, and justice and fairness for the people. He argued for the dismantling of structures, institutions and electoral rules and systems which appeared, in his view, to serve the interest of the dominant political party PAP rather than the interest of Singapore and its people. He asked our government to remove obsolete laws such as the ISA to free people from their fear, so that people are able to participate in discussions, debates and constructive criticism, for the sake of the progress of Singapore.
Whether Mr Jeyaretnam was doing this because he loved the country or because he was getting back at a somebody, I would not know and I do not care. All I can see is that, as he raged and ranted about issues (and some of them made a heck lot of sense to me), some of the other guys in Parliament either ignored him, looked the other way, jeered at him, or held back their opinion because maybe they cared more about their personal vested interest (read: multi-million dollar salary) than what is good for Singapore.
That is why, as I read his lonesome speeches through the pages of his book, I felt that I was repeatedly slapped by this remarkable man, who persisted in fighting for his cause, something that he thought was the right thing for him to do, even though he was financially destroyed during the process.
I felt ashamed. If only I had just stopped to at least listen to what he had to say as he yelled at us outside the MRT. Why did I not give him my ear for 10 precious minute of my life, when the man gave almost his entire life for the cause that he believed in? The fact is, I have seen him several times and I did not bother to stop once to listen. I am feeling ****ing remorseful now.
I learned many other things from the book. Mr Jeyaretnam cited many quotes from all over the world on democracy, freedom and the rule of the law. One of the most instructive segment of the book was on page 142:
And so the Barons gathered to put an end to this rule by the Monarch without any law and they passed a number of declarations. These declarations were later accepted by the Monarch, Henry III, I think and came to be known as the Magna Carta, the great Charter.
Wikipedia has this to say about Magna Carta:
Magna Carta required King John of England to proclaim certain rights (pertaining to nobles and barons), respect certain legal procedures, and accept that his will could be bound by the law. It explicitly protected certain rights of the King’s subjects, whether free or fettered—most notably the writ of habeas corpus, allowing appeal against unlawful imprisonment.
Philip, I am a practical guy. I am not good at banter or inspirational speeches. I just try to get things done. I notice that Henry III (if your Dad was correct) stopped his nonsense after a group of Barons stood up and effectively asked the King to back off. See? The King listened only after the Barons, the rich and powerful guys spoke, not the small potatoes. Therefore, to me, to stop some of the nonsense that I am seeing in Singapore, one hope for the rest of us is when some of the rich guys in town decide that they are done with just making money for now, and they want to focus on doing something to stop some of the nonsense in Singapore.
Philip, you are a big lawyer working in a big law firm. I am sure you come across some high net worth individuals. I am sure they know who you are. Maybe some of these guys want to do the right thing, but they need just a little nudge from you? Perhaps you could start by giving them a present, a copy of your father’s book, and hopefully some of them will eventually read the book, like how I eventually did? If you are already doing that, I say, “continue the good work.”. If not, then I say “if you never try, you will never know. Don’t be shy.” Unless, of course, you are actually in the process of working out a migration plan. Then there is really nothing else that I want to say.
Mr Jeyaretnam’s book also contains good legal advice for a layman like me. Chapter 19, titled “Presumption of innocence - The right of accused persons” supplies many useful tips on what to do when the police pays people a visit. At least I now know that the first thing I need to do is to ask “Friend, what are the charges against me?” followed by “Wait, I need my lawyer, and you better don’t ask me to blindly follow you back to police station, or else my lawyer can tell you and your boss a lot of things later.” I have also learnt that if I ever land myself in court (heaven forbids that, of course), I’d be better off engaging a lawyer to tell the Judge as many stories as possible, and not to assume that if I keep silent, I am presumed innocent. It is particularly scary to read the part on the possibility of how, in Singapore, other people who are being charged can save their own skin by implicating me and getting me in trouble before the law, even when there is no direct proof that I have done anything wrong. Solution: I better make friends with more lawyers in times of peace.
I believe that you father’s book deserved to be read by Singaporeans. I’d like to tell you that there is Internet which can make it very easy for people to get your dad’s book. Just a couple of mouse click and the entire book goes to your PC in the form of a PDF file. I hope someone could approach the publisher of your dad’s book, to check if such an electronic version of the book could be made available, for people to download it from websites such as Civic Advocator. Of course, if people wish to donate money during the process, I am sure arrangement could be made to share the proceeds with the publisher. The copyright mumbo jumbo relating to internet distribution of books could get quite messy. But I believe you could help, if you want to.
Philip, I also want you to know that I am glad your dad slapped me. In fact, the slapping has just sharpened my vision and I can see things much clearer now. For that, I wish to thank your dad, albeit belatedly, for all the speeches that he made in Parliament for the people of Singapore.
Finally, I wish you and your family the best of spirits and health. Like how your brother Kenneth described in his eulogy for Mr JBJ, I am sure that you feel lucky and proud to carry the name of a man like JBJ.
I write you this email to let you know that there are people like us around. I hope you could choose to help people like us, because, in your own words, no matter who we are, we can do something, we must do something, to make the world a better place. Please consider my ebook idea.
http://forums.delphiforums.com/sunkopitiam/messages?msg=25878.1
I have just finished reading from cover to cover the book, Make It Right for Singapore, written by your father.
I now feel as if he had risen from the grave and gave me a couple of good slaps on my face. I thought you should know this.
Mr J B Jeyaretnam is not someone that I do not recognise. I saw him a couple of times outside MRT stations, waving perhaps the book that I have just finished reading, and screaming at the top of his voice things that I could not remember.
Naturally, I scurried hastily away from him. Having fed all these years with stuff from The Straits Times, I thought it was smart of me not to go near this man or risk being associated with the guy who was trying to hold on to his dear pant as he contested one defamation suit after another (I am writing this as a figure of speech, and I do not mean Mr Jeyaretnam was not properly attired. I am being extra careful here since I am dealing with a Senior Counsel).
I have now read his book of speeches. I thought it would have been better that he pulled me aside then and told me, “Look punk, read my damn book.” I could have then read the book and perhaps found a way to offer him some kind of help. On the other hand, I could have been a coward and just scoot off faster. But Mr Jeyaretnam might not have cornered me in the first place, because perhaps he belonged to a certain breed of gentlemen who would never want to stuff things down others’ throats, unlike the way things are done by some others that we know. Anyway, there is no merit for speculation. It is all water under the bridge now.
Back to you dad’s book. As I said, I finally have the chance to read it, thanks to a friend who gave the book to me. And this is what is going on in my mind right now.
Mr Jeyaretnam must have felt terribly lonely all those times, as he spoke one man against the rest in Singapore Parliament, to advocate for more transparency and accountability on the part of the government, and justice and fairness for the people. He argued for the dismantling of structures, institutions and electoral rules and systems which appeared, in his view, to serve the interest of the dominant political party PAP rather than the interest of Singapore and its people. He asked our government to remove obsolete laws such as the ISA to free people from their fear, so that people are able to participate in discussions, debates and constructive criticism, for the sake of the progress of Singapore.
Whether Mr Jeyaretnam was doing this because he loved the country or because he was getting back at a somebody, I would not know and I do not care. All I can see is that, as he raged and ranted about issues (and some of them made a heck lot of sense to me), some of the other guys in Parliament either ignored him, looked the other way, jeered at him, or held back their opinion because maybe they cared more about their personal vested interest (read: multi-million dollar salary) than what is good for Singapore.
That is why, as I read his lonesome speeches through the pages of his book, I felt that I was repeatedly slapped by this remarkable man, who persisted in fighting for his cause, something that he thought was the right thing for him to do, even though he was financially destroyed during the process.
I felt ashamed. If only I had just stopped to at least listen to what he had to say as he yelled at us outside the MRT. Why did I not give him my ear for 10 precious minute of my life, when the man gave almost his entire life for the cause that he believed in? The fact is, I have seen him several times and I did not bother to stop once to listen. I am feeling ****ing remorseful now.
I learned many other things from the book. Mr Jeyaretnam cited many quotes from all over the world on democracy, freedom and the rule of the law. One of the most instructive segment of the book was on page 142:
And so the Barons gathered to put an end to this rule by the Monarch without any law and they passed a number of declarations. These declarations were later accepted by the Monarch, Henry III, I think and came to be known as the Magna Carta, the great Charter.
Wikipedia has this to say about Magna Carta:
Magna Carta required King John of England to proclaim certain rights (pertaining to nobles and barons), respect certain legal procedures, and accept that his will could be bound by the law. It explicitly protected certain rights of the King’s subjects, whether free or fettered—most notably the writ of habeas corpus, allowing appeal against unlawful imprisonment.
Philip, I am a practical guy. I am not good at banter or inspirational speeches. I just try to get things done. I notice that Henry III (if your Dad was correct) stopped his nonsense after a group of Barons stood up and effectively asked the King to back off. See? The King listened only after the Barons, the rich and powerful guys spoke, not the small potatoes. Therefore, to me, to stop some of the nonsense that I am seeing in Singapore, one hope for the rest of us is when some of the rich guys in town decide that they are done with just making money for now, and they want to focus on doing something to stop some of the nonsense in Singapore.
Philip, you are a big lawyer working in a big law firm. I am sure you come across some high net worth individuals. I am sure they know who you are. Maybe some of these guys want to do the right thing, but they need just a little nudge from you? Perhaps you could start by giving them a present, a copy of your father’s book, and hopefully some of them will eventually read the book, like how I eventually did? If you are already doing that, I say, “continue the good work.”. If not, then I say “if you never try, you will never know. Don’t be shy.” Unless, of course, you are actually in the process of working out a migration plan. Then there is really nothing else that I want to say.
Mr Jeyaretnam’s book also contains good legal advice for a layman like me. Chapter 19, titled “Presumption of innocence - The right of accused persons” supplies many useful tips on what to do when the police pays people a visit. At least I now know that the first thing I need to do is to ask “Friend, what are the charges against me?” followed by “Wait, I need my lawyer, and you better don’t ask me to blindly follow you back to police station, or else my lawyer can tell you and your boss a lot of things later.” I have also learnt that if I ever land myself in court (heaven forbids that, of course), I’d be better off engaging a lawyer to tell the Judge as many stories as possible, and not to assume that if I keep silent, I am presumed innocent. It is particularly scary to read the part on the possibility of how, in Singapore, other people who are being charged can save their own skin by implicating me and getting me in trouble before the law, even when there is no direct proof that I have done anything wrong. Solution: I better make friends with more lawyers in times of peace.
I believe that you father’s book deserved to be read by Singaporeans. I’d like to tell you that there is Internet which can make it very easy for people to get your dad’s book. Just a couple of mouse click and the entire book goes to your PC in the form of a PDF file. I hope someone could approach the publisher of your dad’s book, to check if such an electronic version of the book could be made available, for people to download it from websites such as Civic Advocator. Of course, if people wish to donate money during the process, I am sure arrangement could be made to share the proceeds with the publisher. The copyright mumbo jumbo relating to internet distribution of books could get quite messy. But I believe you could help, if you want to.
Philip, I also want you to know that I am glad your dad slapped me. In fact, the slapping has just sharpened my vision and I can see things much clearer now. For that, I wish to thank your dad, albeit belatedly, for all the speeches that he made in Parliament for the people of Singapore.
Finally, I wish you and your family the best of spirits and health. Like how your brother Kenneth described in his eulogy for Mr JBJ, I am sure that you feel lucky and proud to carry the name of a man like JBJ.
I write you this email to let you know that there are people like us around. I hope you could choose to help people like us, because, in your own words, no matter who we are, we can do something, we must do something, to make the world a better place. Please consider my ebook idea.
http://forums.delphiforums.com/sunkopitiam/messages?msg=25878.1
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