Once Again, Singapore Can and Taiwan Cannot
China Times editorial (Taipei, Taiwan, ROC)
February 20, 2008
A joke has been circulating on the Internet. Citizens from several countries are asked the same question: "What's your personal opinion regarding food shortages throughout the world?" Citizens of each country respond differently. Americans, living amidst abundance and accustomed to waste, respond, "What's a shortage?" Ethiopians, living amidst famine and extreme poverty, respond, "What's food?" Singaporeans, living under one-party, one man rule, respond, "What's a personal opinion?" This is of course is an ironic commentary on Singapore's lack of freedom of expression and thought. But there is no denying that despite being closed to threatening political ideas and opinions, Singapore has demonstrated an economic strength over the past few decades that Taiwan is unable to match.
Both Singapore and Taiwan must cope with the same economic environment. Both must deal with the gravitational pull of the Chinese mainland. Both must deal with competition from Shanghai and Hong Kong in maritime shipping. Both want to become regional operations centers. But Singaporeans regard such challenges as perfectly normal. They don't blame heaven and earth for their lot in life. Nor do they see the mainland China market as Forbidden Territory, where they dare not set foot. Although Chinese constitute a supermajority in Singapore, the nation's ethnic composition is highly varied. Malays and Indians occupy a considerable minority. Yet nobody in Singapore screams about who does and does not "Love Singapore." Who does or does not have a Green Card.
During the rise of mainland China over the past decade (1996 - 2005) Singapore experienced a 5.16% annual average growth rate, putting Taiwan to shame. Singapore recently experienced a financial surplus. It was able to give the public a tax refund. This truly makes one envious. Singapore's Sovereign Fund has received positive reviews and made a deep impression on outsiders. The fact that each citizen is receiving several hundred thousand dollars in tax refunds is considered no big deal. It is viewed as nothing more than an unexpected windfall. What we must not underestimate is the hidden social and economic potential within Singaporean society. That is the basis of Singapore's continuing ability to create wealth for their citizens year after year.
According to a report in the latest issue of The Economist, Singapore's Sovereign Fund is a major international fund for which the global economy is familiar hunting ground. Not long ago, Taiwan's Changhua Bank was for sale. Singapore's Temasek arrived to make a bid. The public probably still recalls. According to The Economist, Singapore's Sovereign Fund has about 330 billion in US dollars. It is second in total assets only to the United Arab Emirates, with 875 billion in US dollars, and to Norway, with 380 billion US dollars. Mainland China is still authoritarian. For the government to authorize the establishment of sovereign funds isn't necessarily praiseworthy. But Singapore's establishment of a Sovereign Fund is an expression of its pride, something which Taiwan today lacks.
First of all, if a Sovereignty Fund can strut its stuff on the global stage, that means the government has allowed it enormous flexibility. Only then can it avoid being manipulated by international money managers. For a government to grant a fund manager flexibility is not difficult. The difficulty is in retaining rule of law oversight. For years Singapore's government has demonstrated a high degree of efficiency. Despite one-party rule, the ruling party's system of oversight is able to ensure efficiency. One rarely hears of corruption. On Taiwan, by contrast, the DPP toppled the KMT by shouting anti-corruption slogans. Yet during the DPP's eight year long rule what has it done but engage in corruption on a scale never before imagined? Although the Republic of China government has over 100 billion in foreign exchange reserves, does it really dare turn over these billions in funds to the ruling authorities to dispose of as they see fit?
Over the past eight years, the ruling DPP has engaged in rampant corruption. Over the past half year, despite imminent regime change, it has attempted to establish a company named "Taiwan Goal." The purpose of Taiwan Goal is to evade legislative oversight and illegally pocket billions in arms kickbacks. These vicious politicians, devoid of any sense of honor, are intent on getting while the getting is good. If ROC China taxpayers were to turn hundreds of billions of dollars in assets over to their ilk, who knows what kind of scandal would ensue?
Singapore government officials are exceptional. Their management of state owned enterprises is second to none, even that of private enterprises. That is why Singapore is enjoying a fiscal surplus. That is why it can effectively operate its immense Sovereign Fund. On Taiwan, by contrast, our Minister of Education neglects his duties. He spends his days tearing down Chiang Kai-shek name plaques, "de-Sinizicing" public school textbooks, changing "zhongwen" to "huawen," and other pointless activities. Our Minister of Finance meanwhile, appears politically lost. One day he wants to cut this tax, the following day he wants to change that tax. He is utterly incapable of suggesting any coherent policy. Our Minister of Finance knows only how to implement the ruling regime's Closed Door Policies or to abet its corruption. It brokered the sale of Taiwan Television Company. It dared not raise gasoline prices amidst the energy crisis. Our Financial Supervisory Commission knows only how to promote the ruling regime's Orwellian "Second Financial Reform." It lacks the courage to allow businesses to invest on the mainland. If Taiwan were to establish a Sovereign Fund and turn it over to this bunch of incompetent thieves, what result could one reasonably expect?
Look at how Singapore has returned its fiscal surplus to its people. Look at how its Sovereign Fund shines on the international stage. Now look at Taiwan's current problems and challenges. After eight years of struggle, our future is rapidly slipping away. How will a new administration deal with this predicament? That will be their greatest challenge.