It’s not slower growth, stupid!

Vivian Balakrishnan -

“An email from Void Decker!”

Dear Vivi,

Long time no hear! Having fun immersing yourself in your current job as Environment and Water Resources Minister? I was so happy to see you in the news yesterday. It’s always good as a politician to keep your profile up despite your literally shitty portfolio. Remember, visibility is key!

For bloggers, it’s easy because they can just write some silly things to make fun of the government. Politicians, on the other hand, are supposed to be wise. I’m glad you have used the old trick of looking clever by repeating the party mantra when you actually have nothing of value to add. It’s a good one you’ve picked this time, to warn of slower growth. Singaporeans can be a little daft sometimes and need a constant reminder, so it’s timely that you have added to what our MTI folks and Shanmy have already told us recently. Naturally I’m also aware of this letter your guys planted in the Straits Times Forum last week. Now that was a good laugh! I’m sure it’s only a matter of time before you get it into their stubborn heads.

I spoke to a few Singaporeans today and unfortunately they don’t quite agree with what you said. It can be quite exasperating to be honest and I feel like telling them, it’s the economy, stupid! It’s amazing how many Singaporeans don’t realise that this tagline you guys stole from Bill Clinton’s presidential campaign is as relevant today as it was in 1992. And these are supposed to be our bright young men, the future of our nation. Anyway, I’m writing you today to provide some feedback from them.

You see, these guys told me you have misunderstood them. They are not asking for slower growth. What they are asking for is growth that is more organic, sustainable, and real. But because Singapore is not very good at doing that right now, the result will likely be slower growth as we restructure our economy. They said it’s bad to have artificial growth on steroids, because steroids are unhealthy and make our women grow facial hair and sound like men, which creates more problems by depressing our already pathetic birth rates. A little protein supplement is fine, according to these guys, but we do need to do our own lifting now and then for our muscles to grow. It’s a bit abstract to me, but I guess you can check with Kee Chiu that crazy gym rat what that means.

I probed them further — how can growth be unreal or bad? So they pointed out a few examples in the corporate and investment world of the kinds of growth that are not healthy.

Some companies grow by buying up other companies, they said. This is typically the modus operandi of those with loads of cash in reserves but where the management has run out of ideas (it did ring a bell as I was hearing this). In most cases, acquisitions allow revenues to go up, but there may be ‘negative synergies’. Costs may go up, for example, resulting in lower earnings per share. Or employees may feel marginalised due to restructuring. The company gets bigger but not necessarily better. That is why shareholders may object and stock price may go down if the market thinks it’s a bad idea. To get a better idea of how it relates to us, substitute GDP for revenue, living costs for company costs, and citizens for employees and shareholders.

The guys referred me to some finance website that explains what is organic growth:

Organic growth represents the true growth for the core of the company. It is a good indicator of how well management has used its internal resources to expand profits. Organic growth also identifies whether managers have used their skills to improve the business.

I’m still not convinced though. After all, any growth is good growth. And as the old man tells us, a rising tide that lifts all boats will take care of the rest. We really shouldn’t change what has worked for us all these years. What is the phrase in that book we learned from? More stitches, less riches?

Then the guys gave another example in the investment world of a type of fund that does not grow by generating returns internally. Artificial returns are paid out using money from new investments. Since you need to constantly pump in new investments, it has to go bust one day even if you manage to suck up all the money in the world. They won’t tell me what it’s called because it supposedly goes by a dirty name that can get one sued for saying it. I thought the way it works is similar to what you guys are doing over there with the economy and foreign workers, but I quickly shut up when they informed me it’s illegal.

In essence, this is the message they asked me to convey to you and your colleagues:

We want an emphasis on growth through internal means such as innovation and productivity improvement, not through massive labour influx. Ceteris paribus, high growth is unquestionably ideal. But what is the point when Singaporeans are worse off as a result? That’s what we want from the government — consider the people’s well-being and the necessary trade-offs, which may mean slower growth, instead of using GDP numbers as the underlying guide to every social and economic policy decision.

In response to what Dr Balakrishnan said, we are not asking for slower growth in the hope that it might reduce social inequality. We are asking for a refocus on organic, sustainable growth and an urgent address into social inequality, which will likely result in slower growth, at least in the near term. We hope the minister understands the difference.

I imagine, of course, that you are a busy man constantly trying to keep your head above the water, what with the floods, foam and all. Therefore, I have taken the liberty to summarise the above and highlighted in bold the important words. Selective listening is an art these days and you need all the help you can get. So please use the below as your Zeitgeist reading on the people’s concerns.

We want… slower growth. We are… asking for slower growth. We are asking for… slower growth.

Oh, one last thing, the guys asked me what’s with your sinister advice to “think carefully about what you want for your future”. They asked me if it was a threat! I’m sure that wasn’t your intention, but it does sound a little like what I saw on Homeland last evening when Claire Danes asked the bad guy she was interrogating to think carefully about what he wanted for his daughter’s future. Try not to be so creepy and cryptic the next time the media is around, okay? You know they have a tendency to report the wrong things.

Hey Vivi, that’s all for now. Sorry for the long letter, but I get terribly excited when I read of you in the news, which doesn’t happen very often these days. Visit me some time in London when you are not busy treading water!

Your faithful ambassador of void decks,
Void Decker