All-too-subtle Government Messages

HAVING lived in the People's Republic of China for the past month, I have been endlessly tickled by the efforts of the central government to bring its messages across.

A statue of former Chairman Mao Zedong is on practically every university campus. In my own school, big gold words "为国家健康工作五十年", translated, "Work healthily for the country for 50 years" run across the exterior of the sports center. All university students are required to take three modules on Mao, Deng and communist leaders.

This sounds all too familiar to Singaporeans, who have been force-fed with information about the stability, ability and incorruptibility of the Singapore government from primary school, all the way to university, whereby undergraduates are required to take at least one Singapore Studies module.

In China, the straw that broke the camel's back for me came in the form of "新闻联播", or "Joint News Broadcast". For half an hour every evening, all the channels on television that would like to show news must show news from the same source, China Central Television. So regardless of what channel you flick to, the news message is the same.

The template is rather standard. The first 10 minutes would cover victories and breakthroughs in China, the second 10 minutes would be an update on Chinese communist leaders and the third 10 minutes would focus on negative stories from other countries.

The governments of China and Singapore are not the only ones who go through great lengths to ensure the right information is passed to their citizens. The Japanese governments rewrote history to make Japan a victim of the second world war. The North Korean government tells its citizens they are living in paradise.

The people of a young and immature society are easily led to believe what their leaders want them to believe. As the society matures, so do the citizens. For how long can governments keep up their all-too-subtle propaganda? It remains to be seen.

You can lie to all of the people some of the time, you can lie to some of the people all of the time, but you cannot lie to all of the people all of the time.

*The writer would like to stress that his minor disagreements with the afore-mentioned governments' methods does not change the fact that he has utmost respect for them.

Taming of the FDI-Driven Tigers

LAST July, I did a presentation at Harvard Summer School, whereby I did a comparison between the European Celtic economy of Ireland, and the Asian Tiger economy of Singapore.

Apart from their physical size, there are startling similarities between the two countries and their economies (see table below, info from 2007, source: CIA). Of particular interest to me was the fact that both economies were driven by foreign direct investment (FDI).

I lauded the foresight of the governments in attracting FDI into their countries as a viable long-term development plan that will ensure not just economic growth but sustainability too.

However, recently released GDP growth forecast figures seem to suggest that the tigers are losing their growl. A Reuters poll indicates that the Singapore economy is likely to shrink by close to 5 per cent in 2009. A European Central Bank Official predicted that the Irish economy will see a 6 per cent contraction this year.

By any standards, the figures are poor. By the roaring standards that have been set by Ireland and Singapore in the past few decades, the figures warrant a state of emergency to be declared!

Although the economies of both countries cooled in 2008, growth figures were still positive, albeit marginally. Why have the two countries been so badly hit by the financial meltdown?

In the Irish case, one reason lies in their severe housing slump. As for Singapore, it is particularly reliant on trade and hence, in a time of a worldwide slowdown, a decrease in exports is bound to hit the country.

With that said, even a housing or export slump should not have such a drastic effect on the economies. To better understand the reason behind the downturn, one needs to divert one's attention to driver behind the economic growth of the two tigers - foreign direct investment.

I advocate attracting of FDI because investment drives the economy - the demand side in the short run and the supply side in the long. In addition, there is a transfer of technology from the investor to the host country.

Because FDI is long term, a slowing of the economy should not have too drastic an effect on FDI. However, this financial meltdown has been touted as the worst downturn since the Great Depression.

We live in extraordinary times. Big companies, once supposedly infallible, are failing, owing to the folly that can be attributed to either themselves, or fellow corporate conglomerates. Governments have their hands tied up in rescuing their own economies.

Hence, this inevitably results in a fall in FDI-growth. Even if current investors stay put (which is a possibility but not so much a probability), the fall in FDI-growth means that Ireland and Singapore faces a fall in one of their key growth drivers.

My suggestion for the Irish and Singaporean government? Look inward for investment (read: a big fiscal stimulus package) to boost the economy, ride the recession out, and continue to attract foreign direct investors thereafter.

I am hearted to see that the Singaporean government has been active on that front and one can only hope that the Irish government similarly sees the wisdom of such a move, and soon.