Lucrative Problems

I got to admit that I love Bollywood and being forced to stay at home and having access to Netflix has allowed me to catch up on a few Bollywood movies. The smattering of Hindi I’ve been able to pick have come from watching Bollywood movies.

Anyway, I watched Aiyaary, where there was a scene about an incident in Kashmir (the long-disputed sore in Indian-Pakistan relations). In this scene, the younger character asks his mentor, “There are intelligent and capable people on both sides. Why is it that we can’t solve the problem?” The reply of the older character replies, “Kashmir is an industry,” and he goes onto explain that too many people on both sides are making money from the problem. He then let’s his protégé understand that, “When you’re making money from a problem, you safeguard the problem instead of solving it.” The dialogue can be found at:

https://www.youtube.com/watch?v=Y-we3SC-NzA

This section of the movie caught my attention because the world is going through a lot of problems. We have a global pandemic, the depletion of natural resources, climate change and now there’s racism in much of the Western world. Old conflicts like Kashmir and the Israel-Palestine issue seem set to get worse.

None of these problems are new. These problems were highlighted in the global media some thirty years ago and if you followed the news in that time, you’d get the impression that these were insolvable problems.

However, if you look at the technological advances that have been made in that period, a sane mind would have to ask, “Why can’t we solve these problems?” Why, for example does South East Asia and the South America get covered in a haze every so often? The annual bout of regional choking haze comes from the burning of forest, which is meant to clear land for cash crops.

When environmentalist complained about the ecological devastation, the standard reply in Southeast Asia (and is now being loudly used by Brazil’s Jair Bolsonaro) was that “the poor world needed to feed people,” and the subtext was “even if it pissed off Western environmentalist,” who were merely imperialist trying to keep us poor.” While this might have been the case in the 1960s, why does this have to be the case in 2020? You’d imagine that we’d have found a way to substitute palm oil in certain products or found a way for farmers to clear land that didn’t kill off the rest of us.

Unfortunately, it’s not been in anyone’s (or at least the people who count) interest to find a solution. The plantation owners keep poor people busy and politicians have been convinced that its in their interest to keep the plantation owners happy.

Here in Singapore, there’s the issue of foreign labour, which has become an issue now that Covid-19 has exploded in foreign worker dormitories. Suddenly, Singapore’s media has shifted its focus on the condition of foreign workers and there have been letters galore about the need to rely less on foreign workers.

True to form, the industry has hit back and there have been a number of letters from “industry” groups, which called for any cut to the supply of foreign labour to be “short-sighted” and detrimental to the economy. One of the most prominent forum letters can be found at:

 https://www.straitstimes.com/forum/forum-call-to-cut-number-of-foreign-workers-here-is-short-sighted

The argument against having more foreign workers is unfortunately the same as it is the same argument against any basic improvement to the welfare of foreign workers – namely less foreign workers like better foreign worker welfare will increase the costs for employers who will then have to charge more and make everything more expensive for us, the consumers.

This argument has been used very effectively to dodge solving the actual problem, which is the fact that employing a foreign worker is not actually cheap for employers nor does it give foreign workers the money they thought they’d have but the system benefits a host of other parties like labour suppliers, dormitory operators, labour agents and repatriation companies. Any disruption to the system will inevitably upset a host of other people. Nobody explains the problem better than Alex Au, who works at TWC2, an NGO for migrant workers:

http://twc2.org.sg/2020/05/01/the-dorms-are-not-the-problem/?fbclid=IwAR1nhYuPYZ_hYyigLs3VbUrfO4CLtEXz9XuTbB20EOFyKNU6aOInlRGp5GQ

Crudely put, every foreign worker is a money spinner for a host of parties. The government, despite its generous support for the migrant workers in this pandemic, is in fact one of the guilty culprits. The revenue from the foreign worker levy is a major money spinner (average of $750 per worker per month – the stress of this being an average) for the government. However, in addition to that, there is a quota system, which limits the number of foreign labourers that a company can hire.

The official reason for the levy and quota is that it reduces the price differential between foreign labour and local Singaporean labour. The reality is that it has created a very lucrative niche called Labour Supply. The basics are simple – hire a labourer on the cheap and then “rent” them out to other companies that need labour but don’t have the quota. As one former accountant for a labour supplier says, “The worker works the overtime while the labour supplier pockets the overtime pay.”

Other laws get exploited too. There is a lucrative niche for lawyers working on workman 

compensation. All you need is to find a worker involved in a workman compensation claim. You pay for the housing, flight ticket and perhaps give him a bit of pocket money and once he’s gone back, collect the workman compensation, which is inevitably higher than what you paid.

The answer to our foreign labour problems is simple. You just need to reduce the people in between the labourer and the employer. If you reduce the army of middlemen, the employers can get cheaper labour and the workers can get more money. The key parties would benefit. However, the middlemen form an industry in themselves.

I look at the situation with maids as an example. At one time, a maid in Hong Kong earnt up to $700 a month because there wasn’t a powerful middleman. In Singapore a maid would costs an employer around $700 a month but the maid would only get $400 if she was lucky. The difference between the Hong Kong and Singapore scenario is the fact that there is a levy to be paid in Singapore.

I’ve never argued against the need for middlemen. Agents and even labour suppliers have a role to facilitate the relationship between employer and employee. Dormitory owners also serve a purpose in housing workers. Nobody is saying that these businesses should not be allowed to make a profit.

What is being argued here is that the system needs to be changed so that the most important players (namely the employer and employee) get a fairer deal. The system as it is, remains a problem. It’s a choice between increased costs for employers and basic welfare for workers (which is defined as livable wages and accommodation that does not make people sick.)

Entrepreneurial thinking is needed to restructure the system and the sooner the government bites the bullet and goes through the pain (including losing the addiction to easy levy money), the better it will be for all of us.

The Fawning Follower Strikes Again

You have to hand it to the Singapore system for creating its defenders from the most unlikely of places. The system has turned children of dissidents into its spokespeople (think of Janil Puthucheary, son of Dominic) and it has foreigners from the advanced countries lecturing the locals about how good they have it (I think of the number of times I’ve been told by Europeans to be grateful for what I have in Singapore).

Generally speaking, I don’t disagree with those who sing our praises. The facilities in Singapore are pretty darn good and as I’ll never tire of saying, as a father of a young girl, I’m thankful for the safety of this little Red Dot. We are in so many ways what a society should be – rich, clean and green.

Having said all of that, we are by no means a perfect society and as citizens or even residents, we have an obligation to point out the flaws of the society that we live in. Call it a process of giving feedback to the people that we pay to keep the show going. As Singapore’s government is inclined to see its self as a business, the analogy of the unhappy customers being the greatest source of learning is the most apt analogy that should be used when it comes to the government’s critics. It’s bad enough when the government which prides itself in being like a business behaves in an arrogant fashion towards its intelligent critics, it is even worse when you get foreigners justifying what is a fault.

The Fawning Follower who calls himself a Critical Spectator, has struck again. This time, he’s taken issue with Kirsten Han, a freelance journalist, who has had some articles published by the Washington Post, criticizing the government’s handling of Covid-19 outbreaks in the dormitories that house workers. The Fawning Follower has gone as far as to describe “Betrayal” as theme of Ms. Han’s career. The Fawning Follower’s Facebook posting can be found at:

https://www.facebook.com/CriticalSpectator/posts/2826267214147654?__tn__=K-R

As a matter of full disclosure, Ms. Han and I are related. She’s a second cousin once removed. However, this is a distant relationship and I wasn’t aware of it until my mother pointed it out to me. Ms. Han and I have met once and we don’t interact on Facebook or any social media.

Having disclosed that, I believe that the Fawning Follower is barking up the wrong tree when he calls Ms. Han is traitor to her country, ideals and the poor and underprivileged she claims to support. If you read through his post, you’ll find that his main beef with Ms. Han is the fact that her operation “New Naratiff” is based in Malaysia. The Fawning Follower takes issue with the fact that while Ms. Han has published articles that have been critical of Singapore’s handling of migrant labourers but not doing the same with Malaysia.

As he did in his previous post on the “Workers Dormitories being a Sign of Success,” the Fawning Follower fails to get the point. Just because everyone else behaves in a certain manner or in a worse manner, it does not make a certain action right. Then there’s the issue of where the focal point is.

Sure, Malaysia’s treatment of migrant labour may be worse than Singapore. Migrant labourers in the Arabian Gulf are known to be treated badly as was voiced many times in Qatar’s efforts to hosts the World Cup. However, just because Malaysia and Qatar (and the rest of Arabia) may treat their migrant workers worse that we do, it does not justify how we treat ours.

Then there’s the point that the place where covid-19 is blooming is in Singapore and the focus on how migrant workers are treated is thus far on Singapore and as anyone who has dealt with migrant workers, you’d know that they’re not exactly getting the best deal.

Sure, Singapore’s government has been generous in its support for the migrant workers. However, when you consider the amount of money that the government makes in terms of the levy, the government has a moral obligation to ensure the basic well being of the workers.

The Fawning Follower clearly does not understand the basics of how a society functions and by extension he does Singapore, particularly the government no favours. Instead of rushing the bash the “critics” he should consider being a “Critical Spectator” and watching out for the government he claims to admire.

The Fawning Follower.

One of the most prominent moments in Barak Obama’s Presidency was when he suggested that people who felt that people living on low wages didn’t have it that bad was “Try it.” I often think of this phrase whenever I read comments about workers dormitories and how foreign workers should be grateful for their lot in life because it's  apparently much worse elsewhere.

The most recent character who should try it is a character called “Michael Petraeus,” a Polish national who has reinvented himself as a blogger called “Critical Spectator.” Mr. Petraeus like all good foreigners at the “expat” end of the scale is a devoted fan of the Singapore Government and while he is a spectator, he is not critical of the situation in Singapore.

To be fair, Singapore stacks up pretty well in most aspects of life. We remain for the most part a 

rich, clean and green city. The government machinery for the most part remains pretty good. Our Prime Minister, for example, gets the world’s most generous political salary but unlike his previous counter part across the causeway, nobody has found a criminal and unaccountable sum of money in his bank account. In this era of Covid 19, we’ve also done a reasonable job. If you look at the statistics, we’ve not done as well as we could have when compared to say Taiwan or New Zealand but it's not the disaster of say, the USA, where there’s a national leader undermining safety measures.  

Mr. Petraeus is also a foreigner, who is getting a good deal from Singapore. It might be natural that he takes the view that he should “educate” the locals and show them that Singapore is not as bad as they think it is and as a “guest,” he might feel that its not his place to be critical.

Having said that, Singapore is not perfect. As PN Balji, former editor of the Today Newspaper used to say, “They’ve got about 75 to 80 percent right but you need to harp on the 20 to 25 percent that isn’t right because it’s the only way they’ll stay on their toes.”

Unfortunately, the one area that most glaring errors in the Singapore system is in the area of dealing with the poor and neglected. Our so called “Asian-Values” society that respects elders, for example,  sees nothing wrong with old folks going through the trash so that they can pick out drinks cans to sell for a few pennies because they need the money.

We are also a society that doesn’t seem to have a problem with “slave labour,” and “race-based” pay scales, particularly when it comes to dealing with people who happen to be darker than a shade of pink. Only the blind would argue otherwise.

Unfortunately, Mr. Petraeus is blind spot to the obvious and this causes him to be anything but a “Critical” spectator. His most recent post was to rush the defense of the workers dormitories after the outbreak of Covid-19 cases. His post can be found at:

https://www.facebook.com/CriticalSpectator/posts/2788391291268580?__tn__=K-R

Mr. Petraeus argues that far from being a failure that the NGO crowd have made them out to be, the dorms are a sign of success. His arguments can be summed up as follows:

 1. Singapore has built cheap and good infrastructure by using cheap labour from elsewhere;
       2. The foreign workers are not complaining because what they get here is better than what they get at home;
       3. Singapore is short of land and the dormitories are the most cost-effective way of housing them; and
       4. This is not exploitation because everyone benefits.

     Mr. Petraeus is correct. The dorms are a sign of success. If you are an owner of a dormitory for example, you are bound to be very successful

Take a look at the Centurion Corporation, which owns and runs the Westlite Toh Guan, the dormitory that has become one of the main covid-19 clusters. In the year ending 31 December 2019, Centurion Corporation had revenue of SG$ 133,353,000 and after-tax profits of SG$103,788,000. The joint non-executive chairmen of the board, Mr. Han Seng Juan and Mr. David Loh Kim Kang from Potong Pasir CCC are appreciated by their shareholders.

Mr. Petraeus is also right in as much as the workers generally don’t complain about their lot because they are earning more than what they could earn back home and from what I could see of Westlite Toh Guan from the outside, it does not look unpleasant.

As to how much we’ve benefited in terms of cheap and affordable infrastructure, it’s a question of debate. What is certain is that the trade in labourers has built a few fortunes. In addition to helping the construction companies earn good money from cheaper labour, there is an industry called labour supply. In July 2019, one of the largest labour suppliers in Singapore sold his company for 40 odd million Singapore dollars.

Mr. Petraeus also uses another defense of the system, which is – migrant labourers are always at the bottom of the social heap wherever you go.  

https://www.facebook.com/CriticalSpectator/posts/2792915094149533?__tn__=K-R

However, what Mr. Petraeus seems to forget is that just because a situation exists everywhere in the world or the fact that people don’t complain about it doesn’t make it right.

Everyone knows that the foreign workers are where they are because they want to earn money to help families get out of poverty. They’re willing to work longer hours and for less money than the locals. Nothing wrong with that. However, the real beneficiaries of this business are not the workers themselves but a host of intermediaries like labour suppliers, agents and incidentally, in the case of Singapore, the government, which collects a levy on every foreign worker (which ranges from $600 to $900 per person per month).

While Mr. Petraeus’s point that Singapore benefits from cheap labour might be up for debate, the government definitely benefits from it in the form of the levy. If you take the low-end figure of $600 per person and the fact that there are 284,300 construction workers as at June 2019, that amounts to some S$170,580,000 a month in revenue from the workers levy alone.

While the intention of the levy is supposed to be to reduce the cost differential between the foreign labourer and a local Singaporean, the result is that its encouraged employers to look for further cost savings elsewhere, particularly from the workers.

Some locals have complained that the Singapore government is “wasting” resources on the labourers and that we’re doing more for them than their own governments. However, let’s look at the other side of the equation. The mere presence of the labourers is contributing to the government’s coffers in return for no benefit at all. Call what the government is doing for the labourers a form of investment to ensure the system can sustain itself rather than benevolence. Whatever benefits the government gets from contractors using cheap labour, the one that is clearly measurable is the returns from the levy.

Mr. Petraeus also forgets that the government has admitted that standards for worker accommodation are also not what they should be. Minister for Manpower, Ms. Josephine Teo has said that standards need to be raised and it is clear that current conditions of accommodation are not healthy. While the recent outbreaks of covid-19 have attracted media attention because of their sheer number, this is not the first-time workers have died in Singapore because of an outbreak of disease in their accommodation.

It must be nice for Mr. Petraeus has so much faith in the Singapore government. However, blind faith is not healthy for any organization including the Singapore government. It’s the likes of Mr. Petraeus’s efforts to defend glaring flaws that leads to complacency, which leads to something like the case that we currently have

Perhaps the solution for Mr. Petraeus to celebrate the success that our dorm represent, would be for him to try living in one of them. Perhaps he really would be a “Critical Spectator” rather than a “Fawning Follower.”