MP Low Thia Khiang’s speech on the Presidential Address

25 May 2009

2009年总统施政方针辩论

刘程强(后港区国会议员)

议长先生，

美国在过去几十年来都是世界经济增长的火车头，引领全球经济的走向。美国的资本主义制度和以鼓励消费模式创造需求，促进消费品的生产从而拉动经济增值的方式成为全球经济的动脉。新加坡这个新兴小国，缺乏天然资源和国内市场，唯一的理性选择是吸引跨国企业，通过这些跨国企业所建立起来的市场销售在新加坡生产的产品。这个经济策略使我国的经济与世界经济接轨。在过去几十年间，随着美国和世界经济的稳定成长，我国也奠定了稳健的经济基础。新加坡的运气很好，除了政府推行正确的经济政策和人民努力工作，团结一致推动了我国的经济发展，长时期世界经济的相对稳定也使新加坡能够在过去几十年里持续发展，累积了雄厚的储备金，也在国内建设基础设施，发展成为现代化的新加坡。

全球经济环境的稳定使我们有发展的空间和机会，我国把握了这个机会，也因此使我们有条件应付未来全球经济环境充满阴霾的前景。我有信心新加坡能够应付新的环球经济环境所带来的挑战。

 

经济的模式

我认为，我国一向来吸引外来投资，鼓励企业在自由市场中竞争和走向国际市场以及开放国内市场，使我国的经济能够和国际经济接轨的大方向是正确的。虽然这种经济策略也使到我国的经济对国际经济的变化特别敏感，就如目前我们因为美国金融危机而被拖累一样，我国经济所受到的冲击也相对地比周边其他的国家大，经济下滑的滑坡也更陡，但是，我们别忘了，相同的经济策略也使我国有今天的发展，我相信，这个环球性的经济风暴过去之后，我国仍然能够继续繁荣进步。因此，我认为我国的经济模式基本上是正确的。

不过，随着环球经济环境的改变，面对全球经济增长放慢和保护主义的抬头，我们应该探讨我国未来的经济发展策略。我国一向来依赖跨国企业，尤其是制造业提供大量的工作给人民就业的机会，也依赖这些跨国企业的国际市场销售在新加坡所制造的产品。随着中国和印度的崛起，加上我国的商业和人力成本不断增加，已经无法和劳工成本低廉的国家竞争，再加上这次美国经济风暴造成国际经济衰退，成长放慢，国际市场对产品的需求量减少，我认为，除了一些较特殊的经济领域如药剂业和尖端的科技生产商外，不少跨国企业将从此元气大伤，因此，我国应侧重于发展本国的中小型企业，尤其是知识型和创造型的企业应该会是企业界的明日之星，政府应该大胆投资本地有潜能的企业，就如大笔投资在科研企业一样，并协助这些企业走向国际市场。

此外，我国的商业成本在经济快速增长时大幅度提高，在经济下滑时未能及时灵活调整也是个问题。虽然我们这次所面对的经济问题主要是因为需求突然减少而不是成本过高的因素，可是，当企业面对市场萎缩时是否能迅速减低成本应变是一间公司是否能继续生存下去的关键性因素。虽然今年财政预算案措施的落实对减低企业的运作成本起了一定的作用，但我们应该探讨长远的解决方案，是否可能通过一些宏观和微观的经济控制机制，一方面避免商业成本不会在市场火红时冲破天，在市场突然萎缩时却无法及时调整。

保障新加坡工人的就业与生活

总统在施政方针中说“由于人们不熟悉新移民和外籍工人不同的口音和生活习惯，以及不习惯于职场上的竞争，他们的存在引起一些人的关注。”
我认为，问题的症结所在不是因为讲话的口音不同，生活习惯不一样和职场上竞争这么简单，而是国家认同感的问题。战后出生的一代新加坡人，在我国独立后就被灌输新加坡的国家观念，男性公民入伍接受艰苦的军事训练成为军人，保家卫国的责任落在身上。大家也都明白作出如此牺牲的重要性和必要性。在国家建设与经济的发展过程中，国人无怨无悔的付出。可是，当这一代人开始老化，无法再如以前一样能够有效率的付出时，却被拿耒和外籍工人比较，认为本国工人吃不起苦，对工作挑剔。政府什至给国人的印象是她认为外国的月亮比较圆，外来的人才是人才。这种情况造成不少国人不禁自问，身为新加坡公民的意义何在？因此，要避免外籍工人和新移民有一天酝酿成一个无法避免的炙热政治课题，我认为政府的政策有必要清楚表明和确定优先保障新加坡工人的原则。

我国经济发展的模式，为顺应国际经济市场的变化而调整已使一些中下层工人无法跟上发展的步伐，一样愿意工作，但所能获得的薪金不是不足以维持我国的高生活费，就是被嫌年纪太大。这是政府所必须面对的挑战。

以外籍工人来和新加坡工人相比较是不公平也是不实际的。许多外籍劳工来新加坡的目标是工作赚钱，赚够銭之后回国过他们的生活，他们的家眷也不在新加坡，他们可以接受即使是不符合雇佣法案的工作条件，一个星期工作7天，每天工作12小时也行，只要支付足够的薪水补偿。新加坡工人的生活在这里，须要有生活的空间和休闭，生活所需的费用和条件也和外籍工人不一样。

因此，我认为政府应该考虑把一些需要技术或特别执照的职位，如一些安全管理、起重机操作员、铲泥机驾驶员挖掘公路时须要有公共事业局的执照等工作保留给新加坡人，有关的执照应该只发给新加坡人以保障新加坡人的工作。

如果经济发展迅速，人力资源短缺，雇主无法找到工人而政府必须放宽外籍工人的限制那无可厚非，但面对环球经济发展踌躇不前的情况，政府应该重新调整思维，制订不同的政策，一方面保持新加坡工人在职场上的竞争力，同时确保真的无法竞争的工人也有一份条件让人可以接受的工作。

政府所推行的技能提升与应变计划(SPUR)
以及各种技能培训计划虽然缓和了失业的浪潮，但还不足以解决就业问题。一位为家私上漆的工人告诉我，在教会外国劳工如何油木器后被雇主裁退，接受SPUR
培训了几个星期，受训后还得伸长颈项等待雇用。如何确保被裁的工人在培训后能受雇而不浪费其所接受的训练应该是政府接下来的重点工作。

建设互相关怀的社会，加强社会凝聚力

新加坡不是一间大企业或商业性质的大公司，而是一个国家。经济的发展固然重要，但小国寡民的新加坡，绝对不可忽略其他组成一个国家，使一个国家能长期稳健成长和持续生存下去的要素。社会的凝聚力是其中一个要素。

我在上届大选后2006年总统施政方针的演讲中指出贫富不均和收入差距将成为我国社会未来尾大不掉的问题。政府过后虽然推行了就业入息辅助计划，在某种程度上缩小了贫富的差距，不过，这个政策在未来可能不足以解决问题。随着全球化经济结构的转型，未来的收入趋势可能是高收入者和低收入者出现分歧的状况，由于不同职业在国际市场上的价值不同，一些职业的收入很高，另一些职业的收入则永远无法跟上，社会的结构也因而成为M型，以往所谓的中产阶级为社会结构的缓冲可能逐渐消失，这是如何维持社会凝聚力的挑战。

我认为，社会的价值观是维持社会凝聚力的支柱，也能支撑一个社会的持续发展。如何建设一个互相关怀的社会应该是政府的议程之一。政府的政策不能以经济挂帅，以能否在经济上做出贡献来衡量人的价值。例如，随着人口的老化，医药和社会福利方面开支的增加是无法避免的，但是，政府在面对老年人口增加而必须相对增加开支时的态度却是把老年人口的增加形容为“银色海啸”(Silver
Tsunami) 。

要建立互相关怀的社会价值观，政府政策内涵中的价值观会在社会中发酵。例如政府对教育开支预算比较慷慨，但却是把它当成教育是我们最佳的投资。意思是在等待投资的回报，而不是为年轻的国人提供教育，使他们有光明的前途是政府应有的责任。如果把这种态度应用在我们为何也在教育上津贴外国学生，在原则上还合理，但也应该让人民知道政府津贴外国学生的投资获得了什么回报。在大专教育方面，政府不愿增加津贴，认为大学毕业生一毕业所赚取的收入会更高，也以提供银行贷款和允许动用父母亲的公积金来粉饰我国大专学府的学费人人负担得起。大学生未毕业就先负债，似乎在教育下一代人花未来銭是应该的。可是，随着现在经济情况的改变，政府认为大学生一毕业就会有一份厚薪的工作等着他，政府对大学的津贴不必过高的假设是否仍然正确？我们是否应该检讨国人负担得起大学学费的标准？

培养互相关怀的社会价值观也不能单靠政府和宣传。我想我们每一个人都应该在日常生活中发挥公民意识并公开讨论一个社会所应有的价值观，新媒体(New
Media)在这方面应该可以发挥积极的作用。

以民为本的政治制度

我在前面讲过，新加坡是一个国家，不是一间公司或企业。其本质上的不同是公司的结构以股份为单位，拥有最多股票，最有钱的成为大股东，也自然而然成为董事会成员或主席，然后委任总裁和管理层，控制公司的一切营运，对员工操生杀大权。除了还相信古代帝王制度时代那一套政治理论的人，做为21世纪现代国家的公民，我相信没有人会认同政治领导人拥有国家的大部份，好像公司的大股东一样。

基于此，在每一个国民都一律平等拥有这个国家，也拥有平等的基本权利的大前提下，政治制度必须以民为本，使民意能充份获得表达，政治领导人的产生是人民意愿表达的结果，此外，为了迫使领导人尊重民意，不会因为垄断权力而为所欲为，甚至修改政治制度以确保某个政治集团可以继续不断的执政，因而也加入了监督和制衡的概念，形成了国会中需要有执政党和反对党，在政府实际行使权力的分配方面则有立法、司法和行政三权分立的制度。这就是英国议会民主政治制度设计背后的理念和构思。新加坡在独立时采用了这个政治制度。

我国的议会民主政治制度在独立后的几十年间做了许多修改，其中有触动到这个政治制度的根本性的改变，民选总统制和集选区制就是例子。我提出以上的基础政治理论，主要的目的是希望国人能温故知新，别忘了我国政治制度的根源及其背后原有的意义，也因为在总统施政方针中提出了政治制度要顺应社会改变。

政府施政方针中指出“我们的政治制度产生了一个强大而有实效的政府，为人民所肯定，并对人民的要求和愿望作出迅速的反应。”
这是执政的行动党对我国现行政治制度的肯定并引以为豪的话。上届大选的结果也显示行动党获得大约67%选民的肯定。不过，我要指出的是，我们的政治制度的真正实效还是以人为本，而不是通过制度所发挥的作用和监督制衡来确保其运作的成效。

我国巳经换过两任总理，平稳交棒，过程是执政党内的自家事，就如中国替换领导人的方式一样。此外，执政党掌控了国会的立法权，甚至随时可修改宪法，行政上则牢牢地控制了所有的国家机器和资源，其权力和所拥有的资源远远超越国内任何政党或民间组识的力量，不符合议会民主政治制度下的三权分立的原则。如果有一天执政党滥用权力，践踏民权，或贪污腐败，有谁能奈她何呢？所以，到目前为止，我们的政治制度还未受到真正的考验，是否有一天能够经受得起如当年印尼和菲律宾强势政府一夜之间倒台的政治危机的考验，而之后新加坡是否仍然能生存下去呢？我不敢肯定。

有些人认为，行动党高瞻远嘱，不断自我更新，领导人也清廉可信。但有谁能担保行动党的部长和领导人永远不会贪污腐败？高薪就真的可以养廉吗？也许贪污调查局在这种情况下大可发挥作用，但贪污调查局也在总理公署的管辖之下，那又如何能发挥钳制的作用呢？

更有人认为我们不必杞人忧天，行动党会自我监督，不可能所有行动党的干部党员和议员都蛇鼠一窝，即使到最后闹分裂也还有一半的人才可以治国。我想，当我国走到这个地步时已经是元气大伤。如何通过外在的监督与制衡以避免这种情况的发生才是上策。

虽然反对党在议会民主政治制度设计中的运作必须扮演监督与制衡执政党权力的角色，以使这个政治制度能发挥实效，但我国的反对党到目前为止仍无能力扮演这个角色，甚至在大选时都没有资源可以派出足够人数的候选人参选，以让所有的新加坡公民可以行使投票的权利。因此，我国的议会民主政治制度的运作犹如跛脚鸭。

执政党说她没有责任扶持反对党来为难自己，这等于拿石头砸自己的脚，一副胜者为王、败者为冦的心态。不过，这也不能完全责怪行动党，政治制度是一个国家的根本，是每一个公民都所应该关心的事，即然选民在大选时做出了决定，把大部份的行动党候选人都选入国会，由她掌控大权，可为所欲为的修改宪法和选举制度，行动党有人民的委托，反对党又得不到人民的支持，此消彼长，造成了今天的局面，能怪谁呢？

有人怪反对党不争气，也没有人才。也许是。不过，如果有志之士都因种种现实的问题而不参加反对党，反对党又去那里找人呢？如果连行动党都喊人才难找，更何况是反对党呢！即使反对党能找到有志之士愿意出来参选，却也未必就会得到支持而中选。

也许有人认为反正反对党如果不中选，也可以进入国会成为非选区议员，也可发言，反映民情。反对党的作用不单只是反映民情，而是必须在议会民主政治制度的体制运作中发挥一定的功能，以使这个政治制度能健全的运作。要能够扮演这个角色，反对党必须要能够中选，进入国会才有民意的基础，也有一定的政治资源可以加强一个政党的运作能力。非选区议员是没有选区的代表！有了中选的选区作为后盾，在选区内能有话动的空间，才能扩大人脉，加强一个政党的实力。此外，中选议员通过每周的接见选民，并代表选民向政府部门陈情，才能较准确地把握真正影响民生的课题，也了解政府所推行的政策所获得的成效。这种真实的基层政治经验也同时影响一个政党的政治立场和倾向，对培养一个有理性和负责任的反对党发挥积极的作用。

若要反对党能有效发挥其在议会民主政治制度下的功能，那需要时间和空间来培养和成长。一定要在政治稳定的时候做好未雨稠缪的工作。

总结

一个国家是否能够持续长久生存下去，尤其像新加坡这样一个小国，处在东南亚地缘政治的微妙空隙里，除了在经济上要能走在区域的前头，最好是有能力对区域的经济发展发挥举足轻重的作用；并在军事上拥有超级强国的科技，甚至能向邻国输出军械，协助他们加强防卫力量。然而，这些只不过是硬体〔hardware〕，社会的凝聚力，人民对国家的认同感，以及人民在面对困境时能团结一致才是确保新加坡能长久生存的软体〔software〕，而这个软体是否能良好运行则依赖政治制度的操作系统。〔operating
system〕

http://forums.delphiforums.com/sunkopitiam/messages?msg=29777.2

VOTING-DISTRICT CHANGE: GRCs to shrink, will stay

May 28, 2009

VOTING-DISTRICT CHANGE

GRCs to shrink, will stay

By Zakir Hussain
		Mr Chiam See Tong, seen here on Nomination Day in 2006, won the single seat ward of Potong Pasir in the previous election. -- ST FILE PHOTO

IN A concession to often-made calls for smaller GRCs, the average size of these multiple-member constituencies will shrink to no more than five MPs.

Prime Minister Lee Hsien Loong told Parliament on Wednesday there should not be too many six-member GRCs, as this makes it harder for voters to identify with the whole slate of MPs.

Boundaries up to the committee WHEN Mr Lee concluded his speech, Mr Low Thia Khiang (Hougang) promptly rose to ask the PM if he would ask the boundaries review committee to keep existing constituency boundaries as far as possible, and not gerrymander. He also asked Mr Lee to consider appointing the committee earlier before an election so that the opposition will have more time to look at the changes. ... more Single seats GRCs should remain PRIME MINISTER Lee, however, said single seats should also remain, so that small parties and independent candidates can still contest in general elections. He noted that there were both advantages and drawbacks to having bigger GRCs. On the one hand, they allow stronger multiracial teams to be formed which include MPs with different backgrounds and skills 'to serve voters more comprehensively and effectively'. Resources can also be pooled to run town councils better. ... more

Currently, the average number of MPs in a group representation constituency is 5.4, as there are five six-member GRCs and nine five-member GRCs.

There will therefore be fewer six-member GRCs by the next election, he promised. There will also be at least 12 single-member constituencies, or SMCs, up from the current nine.

Mr Lee said he would make these requirements part of the terms of reference for the Electoral Boundaries Review Committee, which determines the shape and size of electoral constituencies prior to every election. He hastened to add that he has not appointed the committee yet.

Former Non-Constituency MP Steve Chia of the National Solidarity Party told The Straits Times the move was 'a first step in the right direction'.

'From 1988 till now, it's been bad news for the opposition, but finally there's some loosening up,' he said, referring to how GRCs had expanded in size since they first came about 20 years ago.

'We hope the GRCs will be much smaller, and there will be more SMCs.'

In his speech, PM Lee defended the present system of having most MPs elected in GRCs. This was a sound system that ensured multiracial representation, the reason GRCs were first formed in 1988, he said.

'They encourage political parties to appeal to all races with moderate policies and not to one race or another with chauvinist or extremist policies,' said Mr Lee. 'They also put a premium on parties which can field credible teams and therefore demonstrate that they are fit not just to become MPs but also to form the government,' he added.

http://forums.delphiforums.com/sunkopitiam/messages?msg=29775.2

The greatest swindle ever sold

May 28, 2009

The greatest swindle ever sold
By Andy Kroll

On October 3, 2008, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the US government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of US$700 billion to stabilize the nation's failing financial systems and restore the flow of credit in the economy.

The legislation's guidelines for crafting the rescue plan were clear: the TARP should protect home values and consumer savings, help citizens keep their homes, and create jobs. Above all, with the government poised to invest hundreds of billions of taxpayer dollars in various financial institutions, the legislation urged the bailout's architects to maximize returns to the American people.

That $700 billion bailout has since grown into a more than $12 trillion commitment by the US government and the Federal Reserve. About $1.1 trillion of that is taxpayer money - the TARP money and an additional $400 billion rescue of mortgage companies Fannie Mae and Freddie Mac. The TARP now includes 12 separate programs, and recipients range from megabanks like Citigroup and JPMorgan Chase to automakers Chrysler and General Motors.

Seven months in, the bailout's impact is unclear. The Treasury Department has used the recent "stress test" results it applied to 19 of the nation's largest banks to suggest that the worst might be over; yet the International Monetary Fund as well as economists such as New York University professor and economist Nouriel Roubini and New York Times columnist and Nobel and Economic Science Prize winner Paul Krugman predict greater losses in US markets, rising unemployment, and generally tougher economic times ahead.

What cannot be disputed, however, is the financial bailout's biggest loser: the American taxpayer. The US government, led by the Treasury Department, has done little, if anything, to maximize returns on its trillion-dollar, taxpayer-funded investment. So far, the bailout has favored rescued financial institutions by subsidizing their losses to the tune of $356 billion, shying away from much-needed management changes and - with the exception of the automakers - letting companies take taxpayer money without a coherent plan for how they might return to viability.

The bailout's perks have been no less favorable for private investors who are now picking over the economy's still-smoking rubble at the taxpayers' expense. The newer bailout programs rolled out by Treasury Secretary Timothy Geithner give private equity firms, hedge funds, and other private investors significant leverage to buy "toxic" or distressed assets, while leaving taxpayers stuck with the lion's share of the risk and potential losses.

Given the lack of transparency and accountability, don't expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony, and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government's $1.1-trillion, publicly funded bailout.

1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer's expense.

When the Treasury Department ditched its initial plan to buy up "toxic" assets and instead invest directly in financial institutions, then-Treasury secretary Henry Paulson assured Americans that they'd get a fair deal. "This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," he said in October 2008.

Yet the Congressional Oversight Panel (COP), a five-person group tasked with ensuring that the Treasury Department acts in the public's best interest, concluded in its monthly report for February that the department had significantly overpaid by tens of billions of dollars for its investments. For the 10 largest TARP investments made in 2008, totaling $184.2 billion, the Treasury received on average only $66 worth of assets for every $100 invested. Based on that shortfall, the panel calculated that Treasury had received only $176 billion in assets for its $254 billion investment, leaving a $78 billion hole in taxpayer pockets.

Not all investors subsidized the struggling banks so heavily while investing in them. The COP report notes that private investors received much closer to fair market value in investments made at the time of the early TARP transactions. When, for instance, Berkshire Hathaway invested $5 billion in Goldman Sachs in September, the Omaha-based company received securities worth $110 for each $100 invested. And when Mitsubishi invested in Morgan Stanley that same month, it received securities worth $91 for every $100 invested.

As of May 15 this year, according to the Ethisphere TARP Index, which tracks the government's bailout investments, its various investments had depreciated in value by almost $147.7 billion. In other words, TARP's losses come out to almost $1,300 per American taxpaying household.

2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference.

While the Treasury Department can make TARP recipients report on just how they spend their government bailout funds, it has chosen not to do so. As a result, it's unclear whether institutions receiving such funds are using that money to increase lending - which would, in turn, boost the economy - or merely to fill in holes in their balance sheets.

Neil M Barofsky, the special inspector general for TARP, summed the situation up this way in his office's April quarterly report to Congress: "The American people have a right to know how their tax dollars are being used, particularly as billions of dollars are going to institutions for which banking is certainly not part of the institution's core business and may be little more than a way to gain access to the low-cost capital provided under TARP."

This lack of transparency makes the bailout process highly susceptible to fraud and corruption. Barofsky's report stated that 20 separate criminal investigations were already underway involving corporate fraud, insider trading, and public corruption. He also told the Financial Times that his office was investigating whether banks manipulated their books to secure bailout funds. "I hope we don't find a single bank that's cooked its books to try to get money, but I don't think that's going to be the case."

Economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, suggested to TomDispatch in an interview that the opaque and complicated nature of the bailout may not be entirely unintentional, given the difficulties it raises for anyone wanting to follow the trail of taxpayer dollars from the government to the banks. "[Government officials] see this all as a Three Card Monte, moving everything around really quickly so the public won't understand that this really is an elaborate way to subsidize the banks," Baker says, adding that the public "won't realize we gave money away to some of the richest people."

3. The bailout's newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.

Under Treasury Secretary Geithner, the Treasury Department has greatly expanded the financial bailout to troubling new programs like the Public-Private Investment Program (PPIP) and the Term Asset-Backed-Securities Loan Facility (TALF). The PPIP, for example, encourages private investors to buy "toxic" or risky assets on the books of struggling banks. Doing so, we're told, will get banks lending again because the burdensome assets won't weigh them down. Unfortunately, the incentives the Treasury Department is offering to get private investors to participate are so generous that the government - and, by extension, American taxpayers - are left with all the downside.

Nobel-prize winning economist Joseph Stiglitz described the PPIP program in a New York Times op-ed this way:

Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year's time. The average 'value' of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is "worth". Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92% of the money to buy the asset but would stand to receive only 50% of any gains, and would absorb almost all of the losses. Some partnership!

Assume that one of the public-private partnerships the Treasury has promised to create is willing to pay $150 for the asset. That's 50% more than its true value, and the bank is more than happy to sell. So the private partner puts up $12, and the government supplies the rest - $12 in 'equity' plus $126 in the form of a guaranteed loan.

If, in a year's time, it turns out that the true value of the asset is zero, the private partner loses the $12, and the government loses $138. If the true value is $200, the government and the private partner split the $74 that's left over after paying back the $126 loan. In that rosy scenario, the private partner more than triples his $12 investment. But the taxpayer, having risked $138, gains a mere $37.

Worse still, the PPIP can be easily manipulated for private gain. As economist Jeffrey Sachs has described it, a bank with worthless toxic assets on its books could actually set up its own public-private fund to bid on those assets. Since no true bidder would pay for a worthless asset, the bank's public-private fund would win the bid, essentially using government money for the purchase. All the public-private fund would then have to do is quietly declare bankruptcy and disappear, leaving the bank to make off with the government money it received. With the PPIP deals set to begin in the coming months, time will tell whether private investors actually take advantage of the program's flaws in this fashion.

The Treasury Department's TALF program offers equally enticing possibilities for potential bailout profiteers, providing investors with a chance to double, triple, or even quadruple their investments. And like the PPIP, if the deal goes bad, taxpayers absorb most of the losses. "It beats any financing that the private sector could ever come up with," a Wall Street trader commented in a recent Fortune magazine story. "I almost want to say it is irresponsible."

4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers' investments.

Compare the treatment of the auto industry and the financial sector, and a troubling double standard emerges. As a condition for taking bailout aid, the government required Chrysler and General Motors to present detailed plans on how the companies would return to profitability. Yet the Treasury attached minimal conditions to the billions injected into the largest bailed-out financial institutions. Moreover, neither Geithner nor Lawrence Summers, one of President Barack Obama's top economic advisors, nor the president himself has articulated any substantive plan or vision for how the bailout will help these institutions recover and, hopefully, maximize taxpayers' investment returns.

The Congressional Oversight Panel highlighted the absence of such a comprehensive plan in its January report. Three months into the bailout, the Treasury Department "has not yet explained its strategy," the report stated. "Treasury has identified its goals and announced its programs, but it has not yet explained how the programs chosen constitute a coherent plan to achieve those goals."

Today, the department's endgame for the bailout still remains vague. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, wrote in the Financial Times in May that the government's response to the financial meltdown has been "ad hoc, resulting in inequitable outcomes among firms, creditors, and investors." Rather than perpetually prop up banks with endless taxpayer funds, Hoenig suggests that the government should allow banks to fail. Only then, he believes, can crippled financial institutions and systems be fixed. "Because we still have far to go in this crisis, there remains time to define a clear process for resolving large institutional failure. Without one, the consequences will involve a series of short-term events and far more uncertainty for the global economy in the long run."

The healthier and more profitable bailout recipients are once financial markets rebound, the more taxpayers will earn on their investments. Without a plan, however, banks may limp back to viability while taxpayers lose their investments or even absorb further losses.

5. The bailout's focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.

The government may not have a long-term strategy for its trillion-dollar bailout, but its guiding principle, however misguided, is clear: what's good for Wall Street will be best for the rest of the country.

On the day the mega-bank stress tests were officially released, another set of stress-test results came out to much less fanfare. In its quarterly report on the health of individual banks and the banking industry as a whole, Institutional Risk Analytics (IRA), a respected financial services organization, found that the stress levels among more than 7,500 banks reporting to the Federal Deposit Insurance Corporation had risen dramatically. For 1,575 of the banks, net incomes had turned negative due to decreased lending and less risk-taking.

The conclusion IRA drew was telling: "Our overall observation is that US policy makers may very well have been distracted by focusing on 19 large stress test banks designed to save Wall Street and the world's central bank bondholders, this while a trend is emerging of a going concern viability crash taking shape under the radar."

The report concluded with a question: "Has the time come to shift the policy focus away from the things that we love, namely big zombie banks, to tackle things that are truly hurting us?"

6. The bailout encourages the very behavior that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.

As Stiglitz explained in the New York Times, one major cause of the economic crisis was bank overleveraging. "[U]sing relatively little capital of their own, [banks] borrowed heavily to buy extremely risky real estate assets," he wrote. "In the process, they used overly complex instruments like collateralized debt obligations." Financial institutions engaged in overleveraging in pursuit of the lucrative profits such deals promised - even if those profits came with staggering levels of risk.

Sound familiar? It should, because in the PPIP and TALF bailout programs, the Treasury Department has essentially replicated the very overleveraged, risky, complex system that got us into this mess in the first place: in other words, the government hopes to repair our financial system by using the flawed practices that caused this crisis.

Then there are the institutions deemed "too big to fail". These financial giants - among them AIG, Citigroup, and Bank of America - have been kept afloat by billions of dollars in bottomless bailout aid. Yet reinforcing the notion that any institution is "too big to fail" is dangerous to the economy. When a company like AIG grows so large that it becomes "too big to fail", the risk it carries is systemic, meaning failure could drag down the entire economy. The government should force "too big to fail" institutions to slim down to a safer, more modest size; instead, the Treasury Department continues to subsidize these financial giants, reinforcing their place in our economy.

Of even greater concern is the message the bailout sends to banks and lenders - namely, that the risky investments that crippled the economy are fair game in the future. After all, if banks fail and teeter at the edge of collapse, the government promises to be there with a taxpayer-funded, potentially profitable safety net.

The handling of the bailout makes at least one thing clear, however: it's not your health that the government is focused on, it's theirs - the very banks and lenders whose convoluted financial systems provided the underpinnings for staggering salaries and bonuses while bringing our economy to the brink of another Great Depression.

Andy Kroll is a writer based in Ann Arbor, Michigan. His writing has appeared at TheNation.com, Alternet, CNN.com, CBSNews.com, and Truthout, among other places. He welcomes feedback, and can be reached at his website.

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China drawn into Myanmar's border strife

May 28, 2009

China drawn into Myanmar's border strife
By Brian McCartan

CHIANG MAI and BANGKOK, Thailand - While the world concentrates on the trial of Nobel Peace Prize laureate Aung San Suu Kyi for violating the terms of her house arrest, another drama is playing out on Myanmar's northern border with China. Here the junta is bullying ethnic ceasefire groups into transforming their armies into border guard militias in a move that threatens to plunge the north back into civil war. Beijing is avoiding involvement in the Suu Kyi drama, but in northern Myanmar, it has no choice.

On April 28, simultaneous meetings were held between Myanmar military commanders and representatives of every major ethnic ceasefire army in the north and northeast of the country.

In Myitkyina, Brigadier General Soe Win, the Northern Command commander met with leaders of the Kachin Independence Organization/Army (KIO/A), and the National Democratic Army-Kachin (NDA-K). The Shan State Army (North) (SSA-N) met with Major General Aung Than Htut, Northeastern Command commander, in Lashio, the Myanmar National Democratic Alliance Army (MNDAA) met with Brigadier General Win Maung and meetings were held with the National Democratic Alliance Army (Eastern Shan State) (NDAA-ESS). Most importantly, Lieutenant-General Ye Myint met with the United Wa State Army (UWSA) in Tangyan, eastern Shan State.

The ethnic insurgents were all given the same three options: surrender, become a border guard force under the Myanmar army, or elderly leaders must retire and establish a political party to contest the 2010 elections.

Under the military regime's plan as outlined to the groups on April 28, the ethnic armies would be incorporated into the Myanmar army as a border guard force in their respective areas. Each group must submit a full inventory of manpower, weapons and units and a list of members who would be retired.

Battalions would be set at 326 men and officers with at least 30 coming from the Myanmar army. Command of each battalion would be split between two ethnic officers and one army officer. The military says it will assume responsibility for salaries and benefits on the same level as regular soldiers. A six-month time frame was given for the transformation. Three levels of committees which would oversee the process are dominated by senior Myanmar army officers with almost no participation by ethnic insurgent officers.

Ethnic representatives said they would have to consult their respective leaderships to which the Myanmar officers gave an end of June deadline for a reply.

On May 20, the UWSA rejected Ye Myint's proposal, saying they would prefer to maintain their current ceasefire status, although they would consider the idea in the future. Myanmar-watchers believe that the other groups will follow the UWSA's lead and the MNDAA, NDAA and SSA-N have reportedly rejected the proposal.

The ceasefire groups say that although this is a change from the previous demands for "exchanging arms for peace", it is still not enough.

At issue for the ethnic groups is the lack of guarantees for autonomy in their areas under Myanmar's new constitution approved in a controversial May 2008 referendum. Although the constitution allots six townships to be designated as Wa Self-Administered Divisions, Bao Youxiang, chairman of the UWSA, said in a speech on the occasion of the 20th anniversary of the founding of his organization on April 17, "The government of Myanmar has finally enfranchised the Wa ethnic region with the status of an autonomous prefecture, which doesn't fully satisfy our request."

The Wa have been using the term "Wa government" in their official documents since late 2008, but the junta has yet to respond to a Wa request to review the constitution and identify the area as the Wa State government special region.

The Kachin groups have claimed in the past that they will not give up their arms since their demands for autonomy for Kachin State were ignored during the national convention which drafted the new constitution. A Kachin State Progressive Party was formed earlier this year separate from the KIO/A and NDA-K to contest the 2010 elections.

Handing over control of their armed wings to the Myanmar army would separate them from the political leadership - a move that finds little support in an area where power often comes from the barrel of a gun. After over 40 years of armed struggle, none of the groups is keen to relinquish the armed forces which they see as protecting the areas for which that they have fought so hard. It could also mean losing control over the lucrative trade in timber, jade, gems, drugs and arms.

Reports from Shan State and Kachin State reported by the exile Shan Herald Agency for News and the Kachin News Group indicate that there is little support for the junta's proposal. For many it is seen as a total disregard for the ethnic groups' calls for greater autonomy and democracy - the two issues that sparked the insurgency in northern Myanmar in the first place.

The threat of a resumption of hostilities in northern and northeastern Myanmar is no small affair and many of the groups have been preparing for that eventuality. The KIO/A claims to have 20,000 soldiers as well as a militia and sources close to the Kachin say there has been increased recruitment and training in recent years. The NDAA, MNDAA and SSA-N each have several thousand men under arms.

The UWSA is by far the largest ethnic army in Myanmar with some 25,000 men. It has acquired more sophisticated weapons - much of it from China - including, according to a March 2008 Jane's Intelligence Review report, anti-aircraft artillery and surface-to-air missiles such as the Chinese HN-5N. Sources close to the Wa say that they have also acquired 120mm howitzers and 130mm field artillery and training from the Chinese People's Liberation Army (PLA) in how to use them.

In a move for self-sufficiency, the Wa have even established an arms and ammunition manufacturing plant in their territory. Weapons have become so plentiful they the group has apparently been acting as brokers or selling directly to other insurgent groups in Myanmar and in northeastern India.

Tensions have already been growing between the government and the ceasefire groups. Relations between the two suffered a heavy blow when Lieutenant-General Khin Nyunt, the former spy chief and architect of the ceasefires, was arrested in 2004 and his military intelligence apparatus largely dismantled. In December 2008, Major General Kyaw Phyoe, the Golden Triangle commander in Myanmar's northeast, ordered the UWSA to disarm. The Wa ignored the order and in January forced Ye Myint and his delegation to disarm before entering Wa territory to hold discussions with the UWSA.

China is Myanmar's biggest supporter, but it is also highly influential with the ceasefire groups in northern and northeastern Myanmar. None of the groups would survive long without China's patronage. China's relations with many of the groups go back to its support of the Burmese Communist Party (BCP) in the 1970s. Beijing later cut off its support for the BCP in the 1980s, a situation that contributed to the 1989 mutiny that saw the dissolution of the BCP and the formation of many of the present ethnic armies including the UWSA, MNDAA and NDAA.

Concern over the stability of Myanmar and its military regime as well as the reality that the successor groups to the BCP as well as the KIA control most of the Myanmar-China border led Beijing to maintain ties with the groups. For the ethnic organizations, this has meant access to Chinese weaponry as well as Chinese development aid and investment in roads, hydropower projects, agricultural projects and cross-border trade.

What the groups provide in exchange is a buffer zone from possible instability as a result of the policies of Myanmar's erratic rulers. In addition, the UWSA and other groups which have become notorious for narcotics production and trafficking, have agreed to ban opium cultivation in their territories and curb the heroin trade to China. Instead, much of the heroin and methamphetamines they produce is transported to Thailand and increasingly to Cambodia, Laos and Vietnam.

Beijing, however, has also moved closer to Myanmar's military rulers once it became clear in the early 1980s that a communist takeover was not likely. China has become Myanmar's greatest arms supplier and has blocked attempts by Western countries to bring the Myanmar issue before the United Nations Security Council. Despite growing international furor over the arrest and continued detention of Aung San Suu Kyi, Beijing has made it clear it does not want to get involved.

Yet, this support is not absolute. Following the crackdown on demonstrators in 2007, China encouraged Myanmar's generals to move toward national reconciliation. In December 2008, Chinese Foreign Minister Yang Jiechi urged Myanmar's ruler, Senior General Than Shwe, to honor the UN's request for an inclusive political process. Most recently, during a visit by Myanmar General Tin Aye to China in April, PLA chief of staff Chen Bingde told him China hoped its southern neighbor could attain stability, economic development and national reconciliation.

In addition, say some analysts of the China-Myanmar border, Beijing is waiting to see which way US policy will go on Myanmar. US Secretary of State Hillary Clinton announced in February that there would be a review of US policy on Myanmar.

Under the George W Bush administration, there was increased interest in the plight of Myanmar's ethnic groups. Several members of the US Congress protested at the gross human-rights abuses committed by the Myanmar army in the border areas against ethnic civilians, especially after a report by the Shan Women's Action Network (SWAN) detailing the systematic use of rape in Shan State by the Myanmar army was released in 2001.

American aid to refugee camps and programs along the Thai-Myanmar border was increased. Ethnic representatives were brought to the US to brief members of congress and Charm Tong, chairwoman of SWAN, met with Bush in 2005. Should the US decide to provide more support to the ethnic groups, China may want to continue or even increase its support as a counterbalance.

Shan State, however, remains problematic for the US due to the drug trade. In 2005, the US Justice Department indicted several leaders of the UWSA, including offering a US$2 million reward for Wei Hsueh-Kang, perhaps Myanmar's most notorious drug trafficker. The State Department's annual report on narcotics trafficking in 2008 said the UWSA remained the dominant heroin trafficking group in the region and the Treasury Department in November called the UWSA the most powerful drug trafficking organization in Southeast Asia. The US has rejected several previous proposals from groups in Shan State, including the UWSA, going back to 1973 to exchange an end to the drug trade for assistance against the government and development aid.

Beijing's influence over the ceasefire groups means, should it decide it is in its best interests, it could force them to acquiesce to the junta's demands, transform their armies into border militias and join the electoral process. This, however, is not likely to happen as China's interests for the moment are better served by keeping the status quo.

China's main interest is stability in Myanmar that allows its strategic and economic interests to remain unthreatened. In addition to its economic activities in the ethnic ceasefire areas, China has become intensely involved in mining and last year beat out India for the 30-year rights to an oil and gas concession off Myanmar's southwestern coast.

Of perhaps more importance is Myanmar's strategic position as a gateway for trade from China's remote Yunnan province and as a transit point for oil and gas through a recently agreed pipeline project that will allow China to receive oil and gas without having to send its tankers through the easily blocked Malacca Straits.

The greatest threat to those interests would be the resumption of civil war in northern Myanmar, which would result in the destruction of border trade zones, the creation of a huge refugee population and the blockage of important routes for trade, natural resources and the new oil and gas pipeline. Most Myanmar analysts believe that any attempt by the government to force the ceasefire groups to surrender or put their military wings under the control of the Myanmar army would be met with force.

The May 20 decision of the UWSA to reject the proposal would not likely have been made without consultation with the Chinese and this creates a dilemma for Myanmar's generals. Should they force the ceasefire groups to obey and risk renewed fighting and angering China, or back off on one of the key steps on the roadmap to democracy?

Ye Myint has offered to return to UWSA headquarters at Panghsang on the Chinese border to discuss the matter further. The Wa have apparently accepted the offer, but a date has yet to be set.

Brian McCartan is a freelance journalist based in Chiang Mai, Thailand.

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CHANGES TO PARLIAMENT: In sync with aspirations

May 28, 2009

CHANGES TO PARLIAMENT

In sync with aspirations

In Parliament on Wednesday, Prime Minister Lee Hsien Loong unveiled changes to Singapore's electoral system aimed at giving it more long-term strength and political robustness. This is an edited transcript of his remarks.

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MAINTAINING growth depends on getting our politics right. We don't possess in Singapore some secret or magic recipe for growth. Individually we are not necessarily smarter or harder working than people in other countries. But as a Singapore team we outperform many other countries. Why is that?

It's because of the trust between the Government and the people, the close relationship between the tripartite partners, and the strong social cohesion we have forged, all of us working together for a better future for all sectors of our society.

Changes like these will keep Parliament in sync with the concerns and aspirations of Singaporeans and strengthen the role of Parliament as the key democratic institution where important national issues are deliberated and decided. Whatever political system we may have, it will only work well if the electorate votes wisely, in the full knowledge that if they vote for frivolous or fickle reasons it will mean a setback to our economy and to our future.

The key underlying factor which makes sure that we can have this trust is in fact a good political system which ensures continuity so that you have consistency from year to year in the direction the country's going, which ensures renewal so that there's systematic political succession; every four or five years a new batch of MPs enters and takes over the baton progressively. And we have also renewal in terms of the way the system works so that it stays abreast of events, and can produce a long period of stable, competent government which will develop and implement policies which will work for the country.

Our political system follows the British model of parliamentary democracy but we have evolved it over time in response to changing needs and to our own circumstances.

I will just cite some of the major changes we have made to our system to show you how far we have come.

In 1963, when we joined Malaysia, we amended the Constitution so that when an MP resigns or is expelled from his party, he loses his seat. It has prevented MPs from switching sides in Parliament and has shielded us from the unstable politics so common in other legislatures.

In 1984, we introduced the NCMP scheme to ensure a minimum representation of opposition members in Parliament.

Then in 1988, we introduced the GRC scheme to guarantee a minimum representation of minorities in Parliament and ensure that we will always have a multiracial Parliament.

In 1990, we provided for Nominated MPs to bring more alternative views and constructive dissent into the House.

In 1991, we created the Elected President. It doesn't affect the House but it's a major component of our political system and the President, with the second key and custodial powers over reserves and key appointments, has become crucial to the whole structure.

In 2001, we provided for overseas voting because more and more Singaporeans are now scattered across all the continents of the world.

All these changes have kept our system well adapted to our needs and have given our people easy access to ministers and senior officials in government through their MPs.

But this is always work in progress, like Singapore.

As the world changes and as Singapore society continues to evolve, so too must our democratic institutions. We are moving beyond providing for the basic survival needs of citizens. We face more complex policy choices and we need more creative ideas for social and economic development. And Singaporeans want national issues to be more fully debated and they increasingly want to participate in this discussion, which is all to be encouraged.

Therefore, we should improve our political system to encourage a wider range of views in Parliament, including opposition and non-government views.

Some of the changes we've made to our system over the years have been in fact for this purpose, like the NCMP scheme or the NMP scheme. But we should do more.

I think there are many benefits to doing this. It will generate more robust debate, it will improve policy formulation, it will expose PAP MPs to the cut-and-thrust of the debate and it will demonstrate what the opposition can and cannot do.

Most importantly, changes like these will keep Parliament in sync with the concerns and aspirations of Singaporeans and strengthen the role of Parliament as the key democratic institution where important national issues are deliberated and decided.

But we have to make the changes carefully. Our goal is to improve on a system which is already working but can still be improved.

We must not jettison the lessons that we have learnt at great cost through our political history and experience over the last half century as to what really works for Singapore, nor should we create a system which inadvertently produces weak governments just to placate those who desire a strong opposition in Parliament.

Singapore has to have a strong and capable government with a clear mandate from the people and the ability to act decisively to protect and advance our interests.

We can't afford a government that is ineffective, indecisive or paralysed by internal divisions. We are seeking a system that works well for Singaporeans and that will deliver good governance, strong leadership and competent leadership.

We are not looking for a system which sounds good in theory but which is unsuited to our conditions and is unworkable in practice. And this approach, this sort of system is what marks us out as different from many other countries.

Why proportional representation won't work for Singapore

OUR political system is based on the first-past- the-post principle. Westminster's like that. We have kept our system first-past-the-post despite making modifications and refinements to it because it tends to produce decisive majorities and enables the winning party to govern effectively. The alternative to the first-past-the-post is a proportional representation system or PR. This will certainly increase representation of alternative views and opposition parties in Parliament but PR systems tend to produce weak governments based on shifting coalitions of different parties. In some countries this is fine. The Scandinavians work it, the Germans work it, the Swiss work it.

In homogeneous societies, the political views are along a spectrum - centre left, centre right, different parties are arranged along that spectrum and, depending on the mood in the country, you form a more left coalition or a more right coalition and then you govern for the next few years.

But it doesn't always work like that. The most extreme example of proportional representation in the world is Israel, where any party can get a seat in Parliament provided it collects just 1 per cent of the total vote of the whole electorate. Israeli politics is much more exciting than Singapore politics. It's characterised by weak coalition governments with small extremist parties wielding a disproportionate influence on the policy of the government because the government needs the minority partner.

Strong leadership needed

IN SINGAPORE'S specific context of a multiracial and multireligious society, situated in a dynamic and unpredictable environment that South-east Asia is, proportional representation would ruin us. We need strong national leadership, we cannot afford a system which is going to produce weak coalition governments.

That's the first reason PR doesn't work for us but I think the most important reason PR doesn't work for us is this second one - that because we're a multiracial, multireligious society, PR will encourage parties to form based on race, on religion, or for that matter based on cause-related issues, to push stridently for narrow interests of their group at the expense of other groups. And this will polarise and divide our society. Instead of politics bringing people together, politics will pull people apart and make them clash, and Singapore will fail.

You can have a hybrid system as Mr Siew Kum Hong suggested, a mix of first-past-the-post voting and some proportional representation seats. There are such systems. If you go to Wikipedia and look for proportional representation, you can see a list of about 30 countries and what sort of PRs they operate. But even hybrid systems have the same tendency as pure PR systems. New Zealand, for example, has a hybrid system. They used to have a first-past-the-post. They changed to a hybrid system. Now New Zealand regularly has coalition governments. There are two big parties but neither can form a government on its own. They always have to negotiate with the small parties, form a coalition. It's a very interesting business.

In the previous coalition government, Labour, led by Ms Helen Clark, the coalition was so diverse that they had parties in the coalition which really didn't support the policies of the government. Helen Clark had to appoint two ministers from her coalition partners who were ministers outside Cabinet. I looked up what ministers outside Cabinet means. It means they are bound by collective responsibility only on the matters in their portfolios. In other words, if I'm the foreign minister - their Foreign Minister was Mr Winston Peters from the New Zealand First Party, a Maori party - I'm the foreign minister on foreign policy issues; I have to abide by Cabinet decisions and support whatever Cabinet decides.

On education, on defence, on trade, on anything else, I'm not bound by what Cabinet decides. I can have my own policy.

And he doesn't sit with the Cabinet on the front bench. He sits near the Cabinet on the cross benches. I think I don't have to elaborate a lot more to explain why we've always rejected PR as being unsuitable for Singapore. Therefore it is best for us to refine our present first-past-the-post system further to fit the changing needs of our society.

I propose three changes to the system.

Non-constituency MPs

THE NCMP scheme was introduced in 1984. Currently the Constitution provides for up to six NCMPs. The Parliamentary Elections Act prescribes a minimum of three opposition members in Parliament, although the President can specify a higher number, up to six, before Nomination Day. So if fewer than three opposition candidates are returned as elected MPs, then you top up to three from the best losers to make with an additional one or two or three NCMPs so that there will be three opposition members in the House. So the Constitution says there can be up to six NCMPs. The law says there will be at least three opposition MPs. The President can gazette that it can be six before Nomination Day, but so far that has not been the practice, we've not done it. So we have at least three opposition MPs. And in the last election, Mr Low Thia Khiang was an opposition MP, Mr Chiam See Tong was an opposition MP. So there was one additional possibility for NCMP offered to the best loser, who was from Aljunied GRC, and it's Ms Sylvia Lim.

The history of the NCMP scheme is quite an interesting one. When first introduced in 1984, in that election there were two opposition MPs elected - Mr JB Jeyaretnam and Mr Chiam See Tong. There was one NCMP who was eligible, Mr MPD Nair of the Workers' Party in Jalan Kayu constituency. The seat was offered to him but the Workers' Party - Mr JB Jeyaretnam was the secretary-general - rejected the seat on his behalf. He had to agree because under our laws, if he accepted the seat, the Workers' Party would have expelled him from the party. He would then have been disqualified.

The following election, 1988, the best loser was again Workers' Party. This time Dr Lee Siew Choh took the seat and occupied it.

In 1991, the best loser was again the Workers' Party. This time Mr JB Jeyaretnam took the seat, despite having been the person who in 1984 insisted he would never accept a non-constituency seat.

Then in 2001, we had Mr Steve Chia of the Singapore Democratic Alliance.

And most recently in 2006, we had Ms Sylvia Lim of the Workers' Party.

The NCMPs, I think we can say fairly, have made their contribution to the national debate. They've expressed opposition views in Parliament. They've let Singaporeans compare the policies and programmes of the government and the opposition. And they've enabled Singaporeans to evaluate the performance of parties and MPs through the continuing debate in Parliament, day in, day out, during the whole term of the government and not just during the short period of the campaign during the General Election.

So this NCMP scheme has achieved its purpose and been accepted by the public.

However, given that there are 84 elected MPs in the House, instead of a minimum of just three opposition MPs, we should increase this to a minimum of nine opposition MPs, including NCMPs. This would make the minimum number of opposition MPs equal to the number of NMPs in the House, which is also nine.

We will amend the Constitution to change the current maximum number of NCMPs that Parliament can legislate from six to nine.

We'll also amend the Parliamentary Elections Act to increase the minimum number of opposition MPs plus NCMPs in Parliament to nine.

So the actual number of NCMPs will then be nine minus the number of opposition MPs who are elected directly to Parliament.

So since the number is nine, there would be no need for the President to specify any number before Nomination Day.

Therefore, whatever the election outcome, opposition members - directly elected or non-constituency members - will form at least one-tenth of the directly elected Members of Parliament who have constituencies. Right now, 84 of them.

We also propose one more change to the NCMP scheme. And that is to amend the Parliamentary Elections Act to set the cap of two NCMPs to come from any one GRC.

This will spread out the NCMPs more evenly and make them more representative of those voters who have voted for the opposition nationwide in a General Election. It will also clearly distinguish between the winning and the losing teams in the GRC because we should not have an outcome where the entire losing team enters Parliament as NCMPs and enjoys almost equal status as the winning team.

For example, if we had done this before the 2006 General Election, the outcome would have been like this:. There were two opposition MPs elected - Mr Chiam See Tong and Mr Low Thia Khiang. Then we would go down in order of decreasing percentage of votes - Aljunied GRC, Workers' Party would have had two NCMPs - Ms Sylvia Lim presumably, plus one; Chua Chu Kang is a single - so Mr Steve Chia; then East Coast GRC, Workers' Party with two NCMPs, up to the team or the party to decide; Joo Chiat, single, Workers' Party candidate, Dr Tan Bin Seng; and Nee Soon Central, single, Workers' Party candidate Mr Lian Chin Way. So two opposition MPs, seven NCMPs.

Nominated MPs

NEXT we will improve the Nominated MP scheme. The scheme started in 1990. Initially the Constitution provided for six NMPs and we in fact appointed two in the first batch and in 1997 we amended the Constitution to provide for up to nine NMPs, which is where it is today. The scheme has worked well. The NMPs represent non-partisan alternative views in Parliament and the NMPs have made effective contributions and raised the quality of debate in Parliament and sometimes, if I may say so, they may have outshone even the opposition MPs.

This NMP scheme should be a permanent part of our political system. At present, each time Parliament meets after an election, Parliament is required to pass a motion resolving that there shall be NMPs for that term. This was a safeguard introduced when the scheme was new because we couldn't be certain how the scheme would work.

But after 20 years this is no longer an issue. As Dr Loo Choon Yong suggested, we will do away with the motion on the NMP scheme in each Parliament so that we will always automatically have NMPs in Parliament.

This will also require an amendment to the Constitution.

We also propose to fine-tune the scheme to broaden the representation of various interest groups. NMPs are chosen by a special Select Committee of Parliament. The committee invites nominations from the public in general but also formally invites nominations from six groups - business and industry, the professions, the labour movement, social and community organisations, media, arts and sports as well as tertiary education institutions.

I think that the committee should broaden its reach to invite nominations from one additional group which we have paid a lot of attention to and would like to cultivate and that is the people sector.

It could be those in the environmental movement, it could be young activists, it could be new citizens, it could be the community and grassroots leaders. This will give civil society a voice in Parliament and encourage civil society to grow and to mature further.

Group representation constituencies

OUR present electoral system is to have most MPs elected in GRCs with a limited number of SMCs (single-member constituencies). This is a sound system. The GRCs ensure multiracial representation in Parliament. They encourage political parties to appeal to all races with moderate policies and not to one race or another with chauvinist or extremist policies. And they also put a premium on parties which can field credible teams and therefore demonstrate that they are fit not just to become MPs but to form the government.

In this GRC system we always have some number of single-member constituencies to keep the entry barriers low, which means small parties can still participate in elections and it will give adequate opportunities to the small parties and to the independent candidates to contest in a general election.

GRCs should continue to be the main basis of our electoral system but we should refine the size and the number of GRCs and SMCs.

The rules are specified under the Constitution and in the Parliamentary Elections Act. GRCs can have three to six MPs each and there must be a minimum of eight single-member constituencies.

In practice, currently there are nine GRCs with five members, five GRCs with six members, making a total of 14 GRCs. There are nine single-member constituencies.

We should fine-tune the implementation of the GRC and SMC scheme in the light of our experience. There's no need to amend the Constitution or the Parliamentary Elections Act. They specify the basic framework for the scheme. Within these limits the Electoral Boundaries Review Committee, the EBRC, has the flexibility to work out specific sizes and configurations of constituencies to match the population distribution.

We can effect the refinements by making them explicit in the terms of reference to the EBRC when I appoint the committee.

There are advantages to having bigger rather than smaller GRCs. They enable stronger multiracial teams to be formed which include MPs who have different backgrounds and skills, who can serve voters more comprehensively and effectively. For example, you can pool resources and provide economies of scales to run town councils more effectively.

Bigger GRCs also require any challenger to field a team and to field a team which is a strong team and offers a serious alternative to have a chance to win. And, therefore, bigger GRCs encourage responsible and credible opposition parties to emerge.

But, at the same time, there are some downsides to size, to having too big a GRC because it becomes harder for voters to identify with the whole GRC or with the whole GRC team. Each MP has to look after his own ward in the GRC and therefore it's not easy for him or her to get to know the voters in all of the other wards.

In the light of our experience, we have concluded that on balance, smaller GRCs, that means fewer than six members, have the edge over larger GRCs, that means six-member GRCs.

Therefore, we should have more smaller GRCs and fewer six-member ones.

I don't think we should rule out the six-member GRCs entirely because sometimes the configuration of constituencies on the ground makes this the most practical option but we should have fewer six-member GRCs.

When the EBRC is next appointed, its terms of reference will state that it should create GRCs such that firstly, there would be fewer six-member GRCs than now and secondly, the average size of the GRCs will be smaller.

The present average size of GRCs is 5.4. The new average should not exceed 5.

This guidance to the committee will achieve our objective of having smaller GRCs while giving the committee enough flexibility to do its work properly.

Within this GRC system it's useful to have a limited number of SMCs but, over the years, the number of voters has increased, the number of elected MPs has also gradually increased and it may rise further as voter numbers increase further.

Therefore, we should increase the number of SMCs to keep pace with the increase in the number of elected MPs.

At present there are nine singles. The terms of reference of the EBRC will state that they should create at least 12 singles.

The changes to smaller GRCs and more SMCs may or may not result in more seats being contested or more opposition MPs being elected. That is not their purpose. Ultimately it's up to the opposition MPs to field candidates to contest the elections and up to the voters to decide who they want to represent them in Parliament.

The purpose of these changes is to make the GRC scheme work better and to strengthen the link between voters and their MPs. We want voters to have a strong incentive to vote for candidates who will do the best job of looking after their interests, representing them in Parliament and forming a government to run their country.

We want the voters to think carefully and decide and vote for the group and the party which will do the best of these three jobs.

At the same time, we want MPs to have a strong incentive, to do their best in these three responsibilities and to work hard, to serve their voters well both individually, as individual MPs, and as a GRC team and therefore win the support of voters.

Overall, the changes to the NCMP scheme, the NMP scheme and the GRC scheme will result in a more balanced electoral system.

There will be at least 12 SMCs, fewer six-member GRCs and a range of smaller GRCs.

Each Parliament will have at least nine opposition members and nine NMPs so that there'll be at least 18 members who are not from the ruling party, which is about one-fifth of the House.

This change in the composition of Parliament will affect the dynamics of the House, between the government and the opposition parties. MPs on both sides will have to learn how to operate in this new environment. Government MPs will have to become sharper at defending their positions, accepting constructive criticisms and scoring points off the opposition, once in a while.

And I'm sure opposition MPs and NCMPs will want to score points too, which they are entitled to, but they must also understand that while they may be in the opposition, they must uphold the political system and the institutions of our democracy and their loyalty must be to Singapore.

Updating the system

THESE changes are not to entrench one party or to deliberately result in weakened governments. They update our political system so that it reflects better the aspirations of Singaporeans.

They provide adequate voice for diverse views in Parliament, including non- partisan views and those who have voted for the opposition, but they ensure that the government which is elected has a clear mandate to govern in the interest of Singapore so that our political system will continue to serve Singapore well now and into the future.

I am making these changes now mid-term not because I'm about to call elections. I have not yet appointed the EBRC but I want to initiate these changes now so that we can discuss and settle this in a calm atmosphere and make the amendments in ample time before the next elections.

These changes are not just for the 2011 GE but also for the long-term strength and stability of the system.

Finally, please remember, whatever political system we may have, it will only work well if the electorate votes wisely, in the full knowledge that if they vote for frivolous or fickle reasons it will mean a setback to our economy and to our future, otherwise we will not have honest leaders to run the system and govern the country.

So voters have to see the parties and candidates for who they are, what they can do and make a decision in line with their true interest.

If the PAP is serving them well, then they should vote for the PAP. If the PAP is letting them down, then they should vote against it.

That way we make sure we always have the best team to serve Singapore well. And to do that we also need good leaders because no system works by itself. You can have the most ideal system on paper, without the right people to operate it, it will malfunction and go awry.

So we must always have honest, able and committed men and women to come forward to contest elections, to serve Singapore. They will make sure the system works properly and, where it needs improvement, they will make changes to address these problems.

I have a good team in place now but my most critical job is to find and nurture more such men and women to be the next generation of leaders. Only then can we secure our future and improve our lives and the lives of our children.

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