MM Lee says Malaysia and Singapore to continue to collaborate

MM Lee says Malaysia and Singapore to continue to collaborate

By Hasnita Majid

SINGAPORE: Minister Mentor Lee Kuan Yew has said Singapore and Malaysia will continue to collaborate on areas of mutual interest such as security and terrorism.

But he sees both countries taking different paths in future because of differences in fundamental views.

He was speaking during the question and answer session of the S Rajaratnam Lecture.

Mr Lee spoke of Singapore and Malaysia sharing a common history. But he sees a different future for both countries.

He said that while Singapore is a multi-racial meritocracy, its neighbours organise their societies on the supremacy of the indigenous population, such as Bumiputras in Malaysia and Pribumis in Indonesia.

As for Singapore, he added that although it is becoming an integrated society, the jury is still out whether it can remain cohesive under extreme circumstances.

He said: “I’m not sure if we’re put through a stress test, if famine breaks out and you’ve got to share your rice, will you share with your family and your clan or will you share it with your neighbour who may not be of the same race? I am not sure what the end result will be because we have not been put through that extreme test which is the final test.”

Mr Lee noted that in its pursuit of improving its competitiveness, Singapore is always raising the benchmark in areas such as cleanliness and efficiency.

While it may make some countries uncomfortable, it is ultimately good for the region.

He said: “We started greening, Malaysia started greening, Thailand started greening, Indonesia started greening. China studied our system, went down to parks and trees and looked at our administrative arrangements and they can go to Shenzhen, Shanghai and the place is green! So I think that we should set the benchmark, raise the standard. They may feel uncomfortable but it’s good for everybody.”

Mr Lee also said that countries that do not adapt quickly to technological changes will lag behind and pay the price.

But Singapore has no intention of doing so.

“I don’t know what changes that will come, but I know that we have to stay ahead and be part of it,” he said.

- CNA/ir

Source : Channel NewsAsia - 10 April 2009

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US banks ‘in better shape’ than expected

US banks ‘in better shape’ than expected

But despite huge bailouts, many may still need more capital

NEW YORK: - For the last eight weeks, nearly 200 US government examiners have laboured inside some of the biggest banks in the United States to determine how they would hold up if the recession deepened.
What they are discovering may come as a relief to both the financial industry and the public: The banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say.

That is the good news. The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say.

Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: If the examiners determine that a bank needs ‘exceptional assistance’, the government, that is, taxpayers, will provide it.

But the tests, which are expected to be completed by the end of this month, are being conducted out of public view. Federal law prohibits the unauthorised disclosure of the results of any bank examination, including the stress tests. Some investors wonder if the new tests are rigorous enough, given the potential problems lurking inside the banking industry.

Regulators recognise that for the tests to be credible, not all of the banks can be winners. And it is becoming increasingly clear, industry insiders say, that the government will use its findings to press certain banks to sell troubled assets. The hope is that by cleansing their balance sheets, banks will be able to lure private capital, stabilising the entire industry.

In some cases, however, the investments of existing shareholders could be diluted by large sales of new stock. Some banks could also face more stringent restrictions on employee compensation or be ordered to change their boards or management. In extreme instances, the government could end up taking larger, perhaps even controlling, stakes.

The state of the industry will come into sharper focus next week, when big banks like Citigroup and JPMorgan Chase start reporting first-quarter results.

Many analysts predict the reports will show banks are on the mend, with help from low interest rates, fat lending margins, dwindling competition and profits from trading in the financial markets in January and February.

In the last six weeks, financial shares have soared on hopes that the worst for the industry is over. But some analysts say investors’ hopes are misplaced. With the recession, banks are likely to record further large losses on credit cards, corporate loans and real estate.

‘Nothing has changed with the fundamentals,’ said Ms Meredith Whitney, a prominent banking analyst who has been bearish on most financial institutions.

The stress tests are playing a pivotal role in the Obama administration’s sweeping plan to shore up the financial industry. Forcing many banks to raise capital might undermine the still-fragile confidence in the industry. But if only a few banks raise more money, the test might lose credibility with investors.

Mr Michael Poulos, a director at Oliver Wyman, the consulting firm, said many big investors were burned after investing in financial companies last year and are averse to doing so again. The stress test findings, he said, could ‘make private capital more eager to come in because they will get a view of the bottom’.

NEW YORK TIMES

Source : Straits Times - 10 April 2009

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Singapore needs to create economic space: MM

Singapore needs to create economic space: MM

Predicting which countries will help it grow is a challenge

By EMILYN YAP

(SINGAPORE) Singapore needs to create economic space, and predicting which countries will help it grow will be a foreign policy challenge, Minister Mentor Lee Kuan Yew said yesterday.

In a question-and-answer session at the S Rajaratnam Lecture organised by the Ministry of Foreign Affairs, Mr Lee said: ‘We have to try and forecast what are the countries that will help us grow.’

He described how Singapore built ties with China as the latter started growing - by taking part in the development of Suzhou Industrial Park, for instance.

Such efforts have made it easier for local businesses to venture into China, he noted. The Chinese ‘know we are straightforward, we’ve got good systems, good management, and we never cheat and never renege on our contracts. And so we have 10,000 investments, separate investments in China’.

But also because of the economic ties, ‘we have to think very carefully before we vote against them on a real issue, on an issue which is their core interest,’ he highlighted.

China’s strength is currently in the economic sphere and it is not keen to change the world order now, Mr Lee also said.

‘What they want is minimum disruption in the status quo as they rise as a major economic, and concurrently, diplomatic and a military force,’ he explained.

Nevertheless, China will guard certain interests strongly, such as its control over Tibet, he observed.

Asked how external relations helped Singapore survive and grow in the early years of its independence, Mr Lee said candidly that diplomacy had in fact worked against the country.

‘In foreign relations, there’s no personal friendships,’ he said. ‘It’s your national interest. And every ministry of foreign affairs has the institutionalised axioms - back the winner - and they expected us to be the loser.

‘We had to prove to them, demonstrate beyond doubt that we are not going to be losers, we are going to stay.’

In his earlier speech on the fundamentals of Singapore’s foreign policy, Mr Lee also stressed that a ’sound foreign policy requires a prime minister and a foreign minister who are able to discern future trends in the international political, security and economic environment’.

A small country must also seek the maximum number of friends while maintaining the freedom to stay independent, Mr Lee said.

Importantly, Singapore must make itself relevant so that other countries have an interest in its survival and prosperity as an independent nation, he said.

Mr Lee also predicted that US-China ties will become the world’s most important bilateral relationship in the later part of this century.

Source : Business Times - 10 April 2009

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PM signals downgrade for economic outlook

PM signals downgrade for economic outlook

But retrenchment and jobless numbers are looking better than expected

By TEH SHI NING

(SINGAPORE) Singapore’s economic forecast will have to be revised downwards as export levels remain depressed in this global recession, Prime Minister Lee Hsien Loong said yesterday.

But retrenchment and unemployment numbers are looking better than expected.

Speaking to reporters after his visit to NTUC’s Employment and Employability Institute (e2i), PM Lee said that the current forecast of a 2 to 5 per cent contraction will be downgraded again when the Ministry of Trade and Industry releases Q1 GDP figures next Tuesday, but he does not expect it to fall into double-digits.

PM Lee also said that it remains uncertain when America, and the global economy, would begin to recover.

There is good news on the jobs front though. The number of layoffs, likely to exceed 10,000 for the first quarter, is lower than expected.

‘We expected a very big wave of retrenchments, particularly after the Chinese New Year,’ he said. ‘But so far, the retrenchment and unemployment numbers have been better than we had feared. And I think the efforts which we’ve put in must have something to do with this.’

These include the Jobs Credit scheme and Spur (Skills Programme for Upgrading and Resilience), which provide grants and subsidies to help employers save jobs and workers to upgrade their skills.

It was to see these schemes in action, that he visited e2i to observe job seekers at training workshops yesterday, PM Lee said. ‘I’m happy to see that the system is running well . . . and that people here are in good spirits, making the effort, willing to go out of their comfort zone to learn something, try something different, and find a job in this environment.’

Labour chief Lim Swee Say, who visited e2i with PM Lee, said that at the four-week-long peak of the first wave, 800 to 900 workers in the unionised sector were being retrenched each week. Retrenchments have since stabilised at about 200 to 300 a week, after job-saving measures kicked in.

But Mr Lim warned against assuming that it would stay that way, adding that a second wave of retrenchment will come. ‘We have to double efforts to help retrenched workers gain employment. Our concern is that the unemployment rate may rise, not because we don’t have enough jobs, but due to a mismatch between jobs supply and skills supply.’

When asked if additional off-Budget measures are on the cards as May Day approaches, PM Lee said that it is premature to speak of extra measures as those under the $20.5 billion Resilience Package are being rolled out and are showing results.

Source : Business Times - 10 April 2009

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Protesters break through security at Asian summit - PATTAYA

Protesters break through security at Asian summit - PATTAYA

PATTAYA - Thai protesters pushed through security at a summit of Asian leaders on Friday, forcing their campaign to topple Prime Minister Abhisit Vejjajiva into the international spotlight.

Some protesters hold up signs after breaking through police cordon near the luxury hotel and waving red posters reading ‘Abhisit get out’ and ‘Thailand needs change’
Thai police vowed to use ‘all means necessary’ to clear the hundreds of protesters away from the beach resort hotel where the leaders of China, Japan, India and 13 other nations were to gather for the three-day summit.

Around 400 protesters faced off outside against at least 200 security forces - including riot police in full gear and army soldiers - who stood in formation outside the hotel.

The security breach came after months of assurances from the government that it would not let the kingdom’s internal political turmoil, which has been boiling for months, disrupt the meeting.

Protesters launched new mass rallies in Bangkok on Wednesday to push Mr Abhisit to resign, insisting that he came to power undemocratically through a court ruling that toppled former premier Thaksin Shinawatra’s allies in December.

‘Today we are not coming to stop the summit. We have come to join the summit to represent the Thai people because Abhisit cannot be responsible for our rights,’ protest leader Arismun Pongreungrong told AFP.

‘Abhisit is not the legitimate prime minister. We have to pressure him to resign.’

Thai authorities have gone out of their way to avoid clashes with protesters since mass violence broke out at a rally by anti-Thaksin demonstrators in Bangkok last October, leaving two people dead and 500 injured.

The protesters on Friday passed through the last line of unarmed riot police with little resistance, chanting slogans, cheering and clapping their hands.

Some protesters arrived on pick-up trucks and on scooters, moving to within 50 metres of the front doors of the luxury hotel and waving red posters reading ‘Abhisit get out’ and ‘Thailand needs change’.

British-born Mr Abhisit has repeatedly resisted their calls to go and his government hardened its stance earlier on Friday, saying it intended to arrest the leaders of the protests against the government.

Mr Abhisit said late on Thursday that he had boosted security in Pattaya for the summit, which groups the 10-member Association of Southeast Asian Nations (Asean) with China, Japan, South Korea, India, Australia and New Zealand.

China earlier this week expressed concerns about security at the summit but said it was confident the Thai government could keep protesters away. Chinese premier Wen Jiabao was due to arrive later on Friday.

The protests have marked the biggest challenge to Mr Abhisit since he came to power four months ago. On Thursday around 100 taxi drivers blocked a major intersection in Bangkok, snarling traffic across the capital.

‘Certain people must take responsibility for all these incidents,’ said the Oxford-educated premier.

Thaksin, a billionaire populist who still has a loyal following among the country’s poor but is loathed by the Bangkok elite, was ousted in a military coup in 2006.

Living in exile to avoid a two-year prison sentence for corruption, Thaksin has been egging on the protesters with nightly messages to them via videolink.

Mr Abhisit announced a public holiday across Thailand on Friday in a bid to ease tension across the country.

The government has repeatedly said it would ensure the security of the summit - which was postponed twice and moved to different cities twice in a bid to keep away from the protests.

‘We are using international standards of security protection for the 16 leaders,’ Deputy Prime Minister Suthep Thaugsuban, in charge of national security, said on Friday. ‘They will be safe.’ — AFP

Source : Business Times - 10 April 2009

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