What is Corporativism, in a Singaporean sense? Search around on Google for "Corporatism" or "Corporativism" and you’ll find a few definitions. For brevity's sake, here’s Wikipedia’s:
“an authoritarian state, through the process of licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their legitimacy.”
As you can see, most people look at corporativism negatively. Marxists (all 18 of you out there in the world) compare it to Fascism because of the idea of class co-operation vs. class struggle - eg. all workers registered under one "trade union congress" which effectively kowtows to government dictates. On the other hand, liberals scream at the absence of individual rights in such a regime, the lack of transparency of the operations of the state, and the stifling of free enterprise.
But thankfully, Singaporeans are neither marxists nor liberals. They are simply pragmatists, and so, this blog entry will be an exercise in political framing, in a language all pragmatic Singaporeans can understand. Yes, Singapore is one big corporation, and therefore, you are all shareholders of that one big corporation. You figuratively and literally have a stake in the accumulated income of Singapore Inc., and should press your rights in such a fashion.
Certainly Singaporeans must get the message by now that the government prefers this arrangement. Two rounds of disbursements have occurred – the New Singapore Shares (NSS) in 2001 and the Economic Restructuring Shares (ERS) in 2003. A brief check at the combined NSS-ERS website shows this year’s dividend rate at 10.9%, a good return in any given year in terms of equity and a stellar one in terms of safer asset classes (presumably a claim on a country’s income is a safer asset class?)
However, from what I understand, the quantum of shares out there are miniscule and hardly worth a sneeze at. If I were a Singaporean, I’d smell an opportunity and use this avenue to pressure the government for more, as well as a higher dividend policy. Currently its 3% + the real GDP growth rate of the previous year. I’d say go for 5% and increase the entitlement. The question is, what level of ownership (i.e. the quantum of shares) is enough to create that sense of ownership in the average Singaporean, set at an optimum level which would not impede the cashflows of the state for crucial re-investment? (presumbly the Singapore government knows this and is not talking)
If the people of Singapore understand their country as a corporation and themselves as shareholders, then many things would become clear. Minister wages make sense. Rents and tolls make sense. The COE and the ERP make sense. Even taking care of expatriates, giving foreign customers better service, and $500 fines for spitting and littering all make sense. And then, Singaporeans would be able to press for reforms that the administrative elites of Singapore would also understand, because reforms would be along the lines of corporate governance and shareholder rebellions, not democracy (corporate governance as a rallying cry has the whiff of Enron; democracy, unfortunately, has the stigma of Tiananmen).
Among other things Singaporeans should ask for:
1. Increased dividend policy as stated above
2. Natural monopolies should have break-even targets (after accounting for necessary re-investment), not profitability targets (ie. like the United States Postal Service)
3. A clear immigration policy should be spelled out, with immigration to those who have added fundamental value to the Singapore economy over years preferred above all else.
4. Public KPIs for ministers and heads of statutory boards for accountability purposes. If they're paid like the private sector, they should be liable for punishment like the private sector – susceptible to demotions, firings, retrenchments and pay reductions.
The grumblings I hear in Singapore are reminiscent of employees in big multinationals bitching about their bosses and their directors getting fat paychecks. It’s time that Singaporeans understood that while they are employees in Singapore Inc., they are also shareholders, and should act as such. It would serve them better than grousing about it on blogs.
Conversely, the state-owned media (i.e. SPH) needs to collectively internalise this political regime and start to work as shareholder advocates, rather than simply management mouthpieces (i.e. move away from being the in-house company newsletter to being the research analyst covering the company). This would give the media greater credibility than it has now, while balancing the state's desire for some control over content.
To me, that would be an interesting development in political science. A new, viable political entity for the 21st century. How's that for putting Singapore on the map?
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3 comments:
right on the dot.
The 'firm' i.e. the 'corporation' is seen to be the most efficient method for producing, bringing in labour, capital and technology towards efficient means of production and therefore spurring the economy, and creating wealth. To believe that the 'firm' would be an ideal model for a 'state' would be a mistake.
First, employees and shareholders of a firm have the choice to opt out. You can sell your shares (as shareholders) or you can resign (as employees). As a member of a state, you don't have such choices. When that choice is taken away, you become easy target to be taken advantaged of.
Second, the firm has no obligation to assist the marginalised members of the firm (e.g. the old and the sick - and no one buys the rubbish on corporate social responsibility). The state has.
Finally, let's not forget the main reason why firms/corporations stay efficient. Competition. States don't have it (although democracy should provide that role). Without it, firms or states run the moral hazard of being self-indulgent, self-gratifying and corrupt.
Systems of organization and models of well-run corporations have been extolled and have inspired states such as Singapore. While many have been effective, let's not forget the implicit assumptions of which corporations have built their successes on. Not everything is transferable.
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