In a Facebook post on Wednesday night, the PM made another statement of breathtaking economic illiteracy. He said, “Singapore must never fall into the same hole as some countries which spend more than they can earn,” Perhaps it is the fact that he studied Mathematics rather than Economics that has led him to make such a fallacious statement. As every first-year student of Economics learns, while one country may be able to increase its savings as long as other countries are willing to go into deficit, if all countries simultaneously tried to increase their savings and run current account surpluses, the result would be a catastrophic slump. This is what caused the Great Depression and fiscal austerity has unnecessarily prolonged the Great Recession since 2009.
However I suspect his motivation is political rather than economic. As the head of Singapore’s elite he has a vested interest in stopping spending on the bottom 80% of the population if it might conceivably lead to a rise in taxes for him and his cronies down the road.
But such fears are unfounded. Singapore is in no danger of spending more than it earns for the forseeable future. We run a current account surplus (which represents our external saving or forgone consumption) of around 20% of GDP year after year. This is already attracting attention internationally from the US and the IMF because of the drag it exerts on world growth.
Singapore has no external debt and while the PAP rip off CPF holders by forcing them to lend money to the government at below-market rates of return, all CPF debt is owned by Singaporeans. So if we were to spend more than we earn we would be borrowing from ourselves. However we are very far away from this ever happening. In fact the rate at which government reserves are accumulating, at least on paper, is accelerating.
As I wrote about in Budget 2014: A Very Generous Amount of Wool Pulled over Your Eyes, the PAP government is hiding a surplus of around $30 billion a year from its citizens. Over the last six years to 2012 the cumulative surplus amounted to $187 billion, even with the poor returns the government has been able to achieve with our captive CPF money. Even the Pioneer Generation Package, which the PM said MPs from both sides of the House had paid tribute to for its generosity, only represents $260 million of current spending and not the $8 billion headline number, which is unlikely ever to be spent. Why then, for goodness’ sake, is the PM talking about taxes having to rise? To quote the PM, “We are alright for the next few years. Beyond that, we must think about raising more revenues.”
One might suspect he has taken leave of his senses. On present trends, using the figures the government reports to IMF, the cumulative surplus to 2020 is likely to be in the region of $250 billion. So either he is mad, mendacious or we should be afraid, very afraid, that our vaunted reserves are not all they are cracked up to be. Government secrecy can be used to hide a multitude of sins.
I wrote about this in “Where have our reserves gone”, “Sherlock Holmes and the Case of the Missing (or Merely Hidden) Reserves“, and “An Unappetizing Picture.” It is one of the classic signs of an autocracy that the government treats the people as children, who cannot be trusted to make decisions for themselves. The Finance Minister’s Budget presentation is certainly like a nursery story for children. It serves to cover their political motives in not wanting Singaporeans to realise how badly they are being short-changed.
However I will reserve further discussion of the contradictions in the PM’s statement to another time. Here I just wanted to make one simple point. If the PM and the PAP were serious about not burdening future generations then why not give HDB owners the freehold of their apartments once they have paid off their thirty-five year loans? As everyone knows, HDB leases are only for ninety-nine years, which means that future generations will have to start the process of paying for a home all over again because the property will revert to the government at the end of the lease.
In his National Day Rally Speech in 2011, the PM said “The way we have done it which I think has been successful has been to give people assets, especially an HDB flat;”. As usual the PM is being economical with the truth, as in an actuality the HDB purchase price should be amortized over the life of the lease. At the end of the lease the asset will be worth zero and our descendants will inherit nothing.
If Singaporeans collectively own the freehold of our HDB properties then we can manage the estates ourselves and make our own decisions about upgrading and redevelopment. The full rise in the value of the land will accrete to us rather than a large part being siphoned off by the government. If the majority of us can never aspire to owning (a share of) freehold property, then we can never become a true democracy, because we will always be dependent on the government. Just as at Cheng San in 1997, the PAP government will continue to try and use Singaporeans’ insecurity over property ownership to ensure that they stay in power. This cannot be to the long-term good of our country
The judgement in my appeal against the IMF Loan Commitment confirmed what has long been apparent: that the government is to all intents and purposes above the law. Furthermore, the judiciary are not there to act as a check on the executive (a “red light” in CJ Chan’s parlance) but instead to “green-light” illegality by preventing citizens bringing actions to have the illegal behaviour stopped. In a uniquely Singaporean version of jurisprudence, the judiciary is essentially subordinate to the executive. In my response I will deal first with the merits of the argument and then with the issue of locus standi.
“The Appellant has failed to establish a prima facie case of reasonable suspicion”
The learned judges dismissed my appeal on the arguments on the grounds that:
- It was clear from the initial draft of Article 144 when the bill was first put before Parliament that the giving of loans was to be excluded from the need for Parliamentary and Presidential scrutiny
- While admitting that they were ill-placed to comment on the validity of the financial arguments that I put forward to show that a loan commitment was a contingent liability and in nature akin to a guarantee the judges went ahead anyway and dismissed my arguments. In doing so they made some shocking mistakes and misinterpreted an excerpt from a US Federal Deposit Insurance Corporation manual whose meaning should have been abundantly clear. They also argued that, despite the overwhelming evidence I had produced to show that regulators and banks treated loan commitments as contingent liabilities in the leading financial centres of the UK and the US, the accounting treatment might be different in Singapore. If that is the case, the IMF should kindly explain why they selected our Finance Minister to be Chair of the International Financial and Monetary Committee if Singapore differs so markedly from accepted practice in major countries.
- Though this was only touched on peripherally the judges also reiterated the nonsensical argument that MAS was an entity separate from the government.
I will deal with the arguments in (a) above first. I argued at the appeal hearing that it was only necessary to look for the original intention behind the legislation if the natural and ordinary meaning of the words was not clear. To any layman, the words “no guarantee or loan should be given or raised” would mean that both nouns could be paired with either verb. The fact that the proposed wording of Article 144 when the Bill was introduced into Parliament suggested that each noun was to be paired with a corresponding verb (the reddendo singular singulis argument) does not mean that we should use that interpretation. The words “debt” and “incurred” had been left out of the Article as enacted by Parliament so the original wording is an unreliable guide. It is equally likely that Parliament wished to have tighter financial controls rather than looser and thus intended both the giving of guarantees and loans to require Parliamentary and Presidential approval.
The Appeal Court judges do not address this issue only saying that they sided with the original judge in his interpretation. They also say that it is not ordinary parlance to speak of “raising” a guarantee and that therefore “raised” in Article 144 must be applied to “loan” only and “given” to “guarantee” only. I fail to follow the judges’ logic here. Just because one noun may not make sense when paired with one of the verbs, it does not follow that therefore we can exclude the other noun from being paired with both verbs if it makes perfect grammatical sense to do so.
In any case I showed that it is common parlance to speak of raising a letter of credit. A guarantee is to all intents and purposes very similar to a letter of credit. Both instruments require the issuer to pay out if the party that is covered by the guarantee or letter of credit fails to do so. The judges say that they are different instruments and serve different purposes. However as their accounting treatment and risk profile for the issuer would be identical it is difficult to see why the example for letters of credit should not apply to guarantees.
However whilst it may be possible to argue about the meaning of the words the judges completely failed to deal with my main point as set out in (b) above. This is that this is a loan commitment and not a loan. If they were ill-placed to comment on the validity of my arguments, not having seen any written submissions from either me or the AG, then why not call for written submissions from both sides after the hearing was over. Alternatively they could have adjourned the hearing to allow both sides to make written submissions. Counsel for the AG called for my submissions to be stricken from the record on the grounds that they involved complex financial and accounting matters for which she had not prepared. This was disingenuous since counsel also refused my offer of a short postponement to allow her to prepare. It is unfortunate that the judges, despite taking nearly seven months to deliver their verdict, did not allow me more consideration given the gross disparity in the resources available to me as a litigant in person as compared with the government.
I produced evidence from a wide variety of sources, including the US Federal Deposit Insurance Corporation’s Manual, the Bank of England’s Yellow Folder and the last published accounts of J P Morgan, the leading US bank, to show that banks were required to record loan commitments as contingent liabilities on their balance sheet. As the judges mention, I pointed out that the UK Chancellor of the Exchequer himself referred to the UK’s loan commitment to the IMF as a “contingent liability.”
This is reinforced by the fact that the interest rate on loans made to the IMF is virtually zero. It is therefore inexplicable how Singapore’s IMF loan commitment could be considered an asset. Since the government pays CPF holders 4% to borrow their money the IMF loan, if drawn upon, must be a money-losing proposition from the moment it is drawn down.
In support of the argument that the loan commitment was a liability not an asset I cited US Statement of Financial Accounting Standards 133. This requires that loan commitments be treated as options on bank balance sheets and marked to market. A loan commitment is in the nature of a call option granted to a potential borrower that gives them the freedom to draw on the money at a time of their choosing. An option cannot be worth less than zero and should normally have a positive value while the writer of the option would have to record a corresponding liability. The option could not be worth less than the present value of the difference between what it would cost the IMF to borrow in the open market and the interest rate that it would pay on the loan if drawn down (effectively zero).
Yet the judges chose to misunderstand my point and claim that they were surprised that as an economist I did not understand the difference between a loan commitment and an option. There may be a legal difference but clearly in economic terms a loan commitment is an option because the borrower has the right to draw down the loan but is not obliged to do so. It is the learned judges who demonstrate their basic ignorance of modern finance theory.
The judges made other basic errors. The judges said that I had quoted Christine Lagarde as calling the new lending commitments by IMF members a “fireball”. In fact what I had said was that The IMF (actually our Finance Minister Tharman) had called the new loan commitment a “firewall”. In Tharman’s own words:
“We all agreed that it was absolutely essential to have the firewall built up at this time. It’s not a day too early to be building up the firewall,”
I pointed out that the commonly understood definition of a firewall was to construct a scorched earth perimeter around a fire to stop it spreading. This was precisely what the new loan commitments were supposed to do, i.e. they were resources to be sacrificed to save the world financial system. To quote Christine Lagarde (see here):
“These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members,” Lagarde stated. “They will be drawn only if they are needed, and if drawn, will be refunded with interest.”
The judges said that the sheer risk inherent in an asset could not turn it into a liability. However they misconstrued my argument. I was arguing that the commitment to make a loan to the IMF was a liability. If properly accounted for, it would have a negative value on the government’s (including MAS’s) balance sheet not only because there was likely to be a negative spread between the cost of funding that loan and the zero interest that would be earned on it but also because of the risk that by the time the IMF drew down the loan both the creditworthiness of the IMF as well as global credit conditions could have substantially worsened.
The judges went on to misinterpret the first sentence of the passage from the FDIC manual that I quoted, which states “In reviewing individual credit lines, all of a customer’s borrowing arrangements with the bank (e.g. direct loans, letters of credit and loan commitments) should be considered” as referring to the customer’s contingent liability. Yet clearly the examiners are referring to the contingent liability of the bank and not the customer. This can be seen further on in the passage which states “Additionally, many of the factors analysed in evaluating a direct loan…are also applicable to the evaluation of such contingent liabilities as letters of credit and loan commitments. When analysing these off-balance sheet lending activities, examiners should evaluate the probability of draws under the arrangements and whether an allowance adequately reflects the risks inherent in off-balance sheet lending activities”. Clearly from the context the manual is talking about the contingent liability of the bank making these loan commitments and whether the allowance that should be made adequately covers the risks. The allowance would appear on the liability side of the bank’s balance sheet and reflect the possibility of loss if the loan is drawn down.
That the judges get wrong something so basic here undermines their claim that their selective interpretation of Article 144 is correct.
To conclude, while the judges accuse me of trying to draw a tenuous connection between a loan commitment and a guarantee, it is the judges who have tried any stratagem, no matter how tenuous and lacking in logic, to avoid having to deal with my arguments. To claim that Singapore follows a different set of accounting standards from the rest of the world will make Singapore a laughing stock globally. Furthermore the fact that the Finance Minister has only survived this court challenge by relying on such a perverse refutation of generally accepted accounting principles makes it clear that Euromoney made an egregious mistake in naming him Finance Minister of the Year 2013. Tharman should be grateful that the judgement was not announced till November 2013, just after the Euromoney award.
In addition the government has had since 1997, when the government’s ability to make loans without getting Parliamentary and Presidential approval was first questioned, to amend Article 144 so that the meaning supports their interpretation. They have failed to so. This is because having ambiguously worded legislation or very widely drawn powers without any checks and balances, as is the case with the Broadcasting Act, suits their purposes and gives them the widest possible leeway in interpretation. However such ambiguity and wide discretion given to Ministers without the possibility of appeal to an independent party is incompatible with the rule of law.
“The Appellant does not have the locus standi to challenge Art 144″
I am not a lawyer so I will make my remarks here brief. The ruling on locus standi effectively puts the government beyond the law except for the most “egregious” breaches. This nevertheless marks a slight advance on the original judge’s ruling that Singaporeans had no right to sue the government unless their private rights had been breached.
Let us leave aside for the moment the question of whether I had suffered damage as a result of my public rights being violated. I argued that as a CPF holder and taxpayer I have suffered damage as a result of the government making a loss-making loan commitment to the IMF.
However the fact that this case involved an alleged unlawful loan commitment of $5 billion and a breach of the Constitution begs the question of what would the judges would define as a breach of the law of sufficient gravity to allow a citizen to sue. The basis of rule of law is that it does not leave discretion in the hands of bureaucrats. By leaving it to the judges to decide on a case-by-case basis what is a flagrant breach of the law surely seems to be admitting that the judiciary are susceptible to political pressure. Will a flagrant breach be different for a PAP government from a future Opposition one? And citing former CJ Chan Sek Kheong’s “green-light” theory of administrative law reduces the judiciary to being merely an arm of the executive, there to facilitate executive decisions rather than act as a check on the executive.
It is a pity that our judges believe that following the way English administrative law has developed since 1977 and applying the “sufficient interest” test would “seriously curtail the efficiency of the executive in practising good governance”. They even go beyond CJ Chan who leaves an avenue for the courts to intervene when the state breaks the law by saying that “the courts can play their role in promoting the public interest by applying a more discriminating test of locus standi to balance the rights of the individual and the rights of the state in the implementation of sound policies in a lawful manner”. Now the appeal judges are saying has to be “extremely exceptional instances of very grave and serious breaches of legality” to warrant allowing an action by an individual in the public interest. Yet the example they cite, of a Cabinet Minister’s abuse of his powers as opposed to the actions of a low-level government officer, is surely engaged here. Even in the case where a low-level government officer breached the Constitution, the Auditor-General considered the issue of sufficient seriousness to make the Ministry of Finance go back and get the President’s approval for the issue of promissory notes in the relatively insignificant amount of US$16 million to the International Development Agency!
The judges also devoted a lot of paragraphs to precedents from the UK about how the courts there have not allowed judicial reviews of the discretion applied by government agencies such as the Inland Revenue in how they deal with classes of taxpayers. However that is irrelevant to the current action, which is concerned with a breach of the Constitution by the Finance Minister. It seems that the judges were clutching at straws in an effort to make their stance on locus standi seem not too far out of step with the UK.
The judges’ argument that Parliament or the President would have intervened if there was a serious breach of legality rather begs the question of how Parliament is meant to intervene in cases in which the Minister is alleged to have broken the constitution by bypassing Parliament. And where the ruling Party has over 90% of the seats despite only winning 60% of the votes and until 2011 won a walkover at every election it is difficult to understand how Parliament can be an effective check on the executive.
As for the President, he failed to intervene in the case of the IDA promissory notes until the Auditor-General pointed out that MOF had breached the Constitution. The judges say that the President could have used Article 100 of the Constitution to convene an advisory tribunal of three judges to consider this question and the fact that he did not choose to do so supports their contention that I should be denied standing. However JBJ requested that the then President convene a tribunal in 1997 to decide the same question and he declined to do so. If the government chooses to bypass getting Presidential approval then the President is unlikely to make a fuss. We are all aware of what happened to Ong Teng Cheong and his decision not to run for a second term after his requests for greater transparency were rebuffed.
My aim in bringing this case was to ensure that we had tighter financial controls over what the government does with our money and to prevent it squandering the huge surpluses it has extracted from the people through bad investments, influence-buying exercises and excessive compensation for the managers. This is a government that would rather give away your money to foreigners than see it spent on your welfare. Ironically the President’s only financial controls are to prevent spending from the reserves on Singaporeans. On the basis of this ruling there is nothing he can do to prevent the money being given away in the form of loans. In a climate where the PAP government is already under scrutiny for banking secrecy, a ruling that we have no ways of controlling a rogue government that breaches the Constitution shows that we have no standards of governance and no rule of law. It is inexplicable how Singapore can be rated one of the most transparent and least corrupt countries when there are such glaring loopholes in financial controls. The judges say that allowances should be made for the cases of the most serious illegality. However in practice, given the award of costs to the AG, this judgement will have a chilling effect on the willingness of citizens to act as watchdogs of the public interest and gives a “green light” to government illegality.
Issued by Kenneth Jeyaretnam on 22 November 2012
FOR IMMEDIATE RELEASE
On 22 October 2012 Justice Tan Meng Lee decided to dismiss my application to have Singapore’s $5 billion loan commitment to the IMF quashed on the grounds that it violated Article 144 of the Constitution. The learned judge chose to rule that Article 144 did not apply to a loan commitment. On this I believe we have good grounds for an appeal. A loan commitment cannot be regarded as anything else other than a liability akin to a guarantee.
Unfortunately in fighting to stop an action based on an ambiguous aspect of our Constitution a completely different aspect of our Constitution was thrown into peril. The learned judge ruled that I had no Locus Standi to sue the government on an issue that affected all Singaporeans equally. In this a vital constitutional right was removed from the citizens of Singapore almost as an aside, causing a well known legally qualified commentator to refer to the judgement as, “ The day our Constitution died” .
What we have achieved so far.
Even without an appeal this case has established on public record several important points:
- We have proven that the Office of the Elected President is toothless and that his Excellency’s office can be completely unaware of constitutional breaches by MOF as in the case of the promissory note to the World Bank. That the Office of the President is without a clear frame of reference is demonstrated by the fact that my letters to the President were erroneously referred to the MAS.
- The MOF initially relied heavily on its assertion that MAS is an independent entity that can do as it wants with our money. We argued that MAS as a schedule 5 corporation was under the jurisdiction of the MOF and in this we were right. It is unlikely that the MOF will ever again try to claim that MAS is an independent entity.
- We have shown that the Constitution is so ambiguous as to be open to different types of interpretation yet one of the fundamental elements of Rule of Law is that the Law must be unambiguous so the discretion of public officials is removed. The AG must surely now recommend that Article 144 be re worded so as to fulfil one of the fundamental conditions for rule of law.
- We have forced a potentially embarrassing ruling demonstrating an ignorance of the accounting definition of liabilities and assets, to go on public record where it can be scrutinised globally.
- We have shown that the AG on behalf of the MOF would rather fight a case through semantics and narrow technical definitions than do the right thing by the people and err on the side of democracy by taking the loan commitment back to Parliament and the President for approval.
Taking into account the enormous risks and costs involved and having achieved so much already I have considered whether there is any merit in launching an appeal. Conversely if the Court is correct it matters not how blatant, how transparent or how deliberate the breach of such a constitutional provision is; the simple and inescapable consequence is that no citizen may challenge it. The learned Justice Tan’s judgement on Locus standi must be of grave concern to all citizens of Singapore and of the common wealth.
Such a conclusion does not sit easily with a country that, at least in the eyes of the West, aspires to be thought of as a democracy and I believe that on this point at least there are good prospects that the Court of Appeal would not uphold the judgment of the single judge.
Seven days ago I announced via social media and my blog that the cost implications of losing an appeal were enormous and that the AG was asking for security of S$20,000. The public immediately began pouring thousands of dollars into a fund for an appeal, Ordinary citizens of Singapore, already squeezed by two decades of austerity, have given this money in sums as small as $2:00. There never could be a greater demonstration of public interest and concern about our constitutional rights.
After much thought and taking into consideration the advice of legal experts and considering the enormous amount of public interest and support I have reached the following decision. The ruling regarding locus standi is of such paramount public interest that it demands an appeal. Also, if the learned judge’s interpretation of Article 144 is allowed to stand, then any future government can take heart from knowing that they can give away our entire reserves without fear of being challenged and that the President has been shown to be unable to stop them.
Notwithstanding the huge risks and the struggle ahead I feel it now behoves to me not to let our citizens down. These good people of Singapore have ensured that we have enough money in the appeal fund to lodge security and file with the courts today.
Let us now hope that Mahatma Gandhi was right when he said,
“First they ignore you, then they ridicule you, then they fight you, and then you win.”
Mr Tan Kin Lian has previously written twice about the constitutionality of the loan that Singapore made to the IMF. He is kinder than me in his writing style but he comes to the same conclusions. And this is a man whom the select panel deemed fit to run for President of our Republic! He thinks the loan was unconstitutional and he wants to help me appeal it on behalf of all Singaporeans.
On July 07th 2012, Tan Kin Lian had raised the issue of constitutionality of the loan here:
Of course he did. As an EP candidate how could he keep quiet? He said, “I am surprised that MAS would give the above type of explanation – as it seemed to defy logic and common sense.”
On July 12th 2012 he wrote an open letter to the Straits Times forum. Here is some of what he said:
” I am. therefore, amazed by the arguments put forward by the Monetary Authority of Singapore that the pledge given to the IMF, as it now stands, did not breach the Constitution. If the position of MAS is correct, it is better for the Constitution to be re-written to reflect the position taken by MAS.
I have highlighted articles from blog spot Article 14 previously on Rethinking the Rice Bowl. ”Subra” states on his blog to be a Singaporean lecturer in law here and he clearly has the talented teacher’s skill of setting out complex subject matter in a simple, easy to understand manner. Several very good reasons why everyone should read his latest article: http://article14.blogspot.co.uk/2012/09/everybodys-talking-about-talking.html But he has added a twist that I didn’t notice.
IN THE SUPREME COURT OF THE REPUBLIC OF SINGAPORE
IN THE HIGH COURT
BEFORE THE SENIOR ASSISTANT REGISTRAR YEONG ZEE KIN
TUESDAY, 21 AUG 2012, AT 9:00 AM, CHAMBER 2-6
9. OS657/2012 KENNETH ANDREW
(L F VIOLET NETTO)
S CHAMBERS (CIVIL
FOR LEAVE TO APPLY
FOR A QUASHING
So, the pre-trial conference for my case to request a quashing order on the IMF loan listed for Tuesday morning, is now in the public arena. The AG has taken what I am told is an unusual step in ‘choping’ the 9:00 am slot. Apparently the more usual form or procedure is to turn up and get in line for a time slot. My guess is that they don’t want any Press hanging around and want to get in and out as quickly as possible. Then again they may just be hoping that the early bird avoids the Wong. That is the Law Society’s Mr. Wong who has a habit of turning up whenever M. Ravi is due in Court or even Chambers. Actually, to be fair to the poor misguided soul, he has given a verbal assurance that he will stop stalking us in future.
With National Day fresh in our minds it is timely to have a quick recap. The PAP may be able to recite the National Pledge but they are oblivious to the meaning of the words and clearly not a one of them understands what ” Democracy” means.
I recently wrote to the New York Times to protest against Ms .Chan Heng Chee’ s letter. I thought it timely to bring up Orwellian newspeak being so close to the 62nd anniversary of the publication of 1984.
Note how these days our civil servants and ambassadors like to come out in support of our vibrant, robust or healthy democracy. (I believe my old friend Michael in the UK wrote a similar missive to the papers defending Singapore’s record on the death penalty and spoke of a robust debate). It’s as though they read 1984 and mistook it for one of those books, “ dictatorship for dummies” or some such. Well they lost no time adopting the idea of a ministry of double speak.
In November 1978 there was a sensational defamation trial held in Singapore. The defendant a Singaporean, engaged a famous British barrister and author John Mortimer. John Mortimer argued that the defendant’s remarks were fair comment. Indeed he went on to tell the court that the ability to engage in robust debate was the essence of democracy. He lost of course.
The ability to engage in robust debate is the essence of democracy.
Knowing that robust debate might lead to democracy , the PAP put a stop to it and then with no sense of Orwellian irony went around claiming to be supporting it on the International stage. Ta Dah! Back home of course, they call a Spade a Kate and tell us we aren’t ready for Westminster style destructive democracy. Here’s the letter.
23rd June 2012
The New York Times
I refer to Chan Heng Chee’s letter dated 21st June entitled “Singapore is Evolving”. Ms. Chan is the Ambassador and her taxpayer-funded time should not be used to produce spin on behalf of the ruling party.
It is ironic that she talks about “a vibrant democracy.” But then the PAP are past masters of Orwellian newspeak. Is it a vibrant democracy when by law all media outlets must be government controlled; when state resources are used to buy votes and the threat of withdrawal of state resources is used to intimidate voters; when Opposition parties are harassed by oppressive restrictions and Opposition leaders are bankrupted through the use of defamation suits; and when the Elections Department is just an arm of the Prime Minister’s Office without even a charade of independence?
Ms. Chan says other countries have anti-terrorist legislation. However Singapore must be alone among robust or vibrant democracies to have detained individuals for over twenty years merely because they refused to give up their fundamental human right to engage in peaceful politics.
The Reform Party
18A Smith Street
+65 65349641/+65 91461976
Dear Santa, I don’t like the cadre and secret cabal I got last year. Next year I’d like some openness, competition and democracy instead.
Recently the PAP held their first Party convention post election allowing us to scrutinise the cadre system and the iron grip on power that it provides for. AlexAuwrote about it in his blog (http://yawningbread.wordpress.com/2011/12/03/four-barriers-to-remaking-the-pap/) where he highlighted his opinion that the cadre system is one of four main reasons why the PAP would fail to learn any lessons from their setback in GE 2011. The rest of his reasons would be worthy of discussion in a separate article in their own right. However as we look back at 2011 I will concern myself with a closer look at the cadre system and how it affects your ricebowl.
It is of course not only the PAP who employs the cadre system. For the benefit of those who may be unfamiliar with the term, a cadre system is one in which the leadership of the Party selects certain members to be cadres. The cadres are then the only members who have voting rights and they elect the leadership. It is of course a completely closed system in which the leadership ensures its position by only selecting as cadres people who will be loyal to them. The cadre vote the leaders who select the cadre who vote the leaders who select ………………..and so on.
In her 1971 political science thesis, “Singapore’s People’s Action Party: Its History, Organisation and Leadership (Oxford University Press)”, Ms Pang Cheng Lian, who sits on the board of Temasek Cares, describes elections to the CEC by the cadres as a “closed system”, in which “the cardinals appoint the pope and the pope appoints the cardinals”. Most of us Singaporeans know this system is employed by the men in white. Sadly, as far as I am aware, every other political party in Singapore employs a variant of the cadre system. This includes the Workers Party, the SDP, the NSP and the SPP. I have no information about the other new parties, the Justice Party the USD (does anyone remember them? ) and the new parties still to come in 2012 but I believe it is safe to assume they all employ or will employ the same system.
Just as Alex believes the cadre system may explain why the PAP is incapable of learning new lessons so I believe that adherence to the cadre system may be partly responsible for the agonisingly slow progress of the Opposition parties and the dearth of new ideas or renewal. It is certainly the culprit behind the endemic Party hopping which discredits all Opposition equally and has nothing to do with renewal of ideas. Party hopping is the same old faces, with the same old ideas but with new titles. It would take a visionary to develop a party with a radically different structure. Or maybe a democracy veteran with no time left to lose who, looking back on his life’s work, realised that closed organisations can’t give birth to Open Societies. Yes, The Reform Party is the only political party in Singapore which is a democracy since it alone does not have a cadre system to protect the leadership and all members have voting rights.
The cadre system has its origins in the Marxist concept of the “dictatorship of the proletariat” and the “vanguard”. This meant that only a small elite group of individuals were fit to lead the Communist Party and the nation. The masses were not ready for democracy and it was better that they be led by those who knew best. The Communist ideal was one of eventual full democracy once the masses had been educated enough. Leninargued (Wikipedia, http://en.wikipedia.org/wiki/Vanguardism) the ideal vanguard party would be one where membership was completely open and its workings transparent, the “entire political arena is as open to the public view as is a theatre stage to the audience” (from What is to be Done?). He seems to be acknowledging the benefits of competition though cannot speak its name when he goes on to say that a party that supposedly implemented democracy to such an extent that “the general control (in the literal sense of the term) exercised over every act of a party man in the political field brings into existence an automatically operating mechanism which produces what in biology is called the “survival of the fittest”.” This party would be completely open to the public eye as it conducted its business which would mainly consist of educating the proletariat to remove the false consciousness that had been instilled in them.
The cadre system went on to be adopted by both the Kuomintang and the Chinese Communist Party and by many other Maoist revolutionary parties throughout the world. Lenin originally intended it to deal with the problems of controlling and maintaining the secrecy of the Bolshevik party which was seeking to overthrow the Czarist regime in Russia, in the face of infiltration by the Okhrana, the Czar’s secret police. Ironically the goal of preventing infiltration, this time by Communist agents, is the oft-cited justification given by the PAP leadership as to why the cadre system was introduced. If so it does not justify its retention today when there is no longer a Communist threat. Even if there were the ideal way of combating it would surely be through more democracy not less.
Of course the Communist roots of the PAP are not a secret. This is why the arbitrary arrest and detention of certain individuals on the grounds that they were Marxists and that they represented a secretive organisation is particularly ironic.
The fact that the PAP continue to maintain a cadre system shows how out-of-step they are with modern democratic parties and how little understanding they have of the benefits of competition and transparency and accountability. While they maintain a closed system which ensures that only people, who hold the leadership’s views, whether out of principle or self-interest, get to vote, it is difficult to see how any renewal can take place. Perhaps it is too much to expect the ordinary people of Singapore to understand the need for multi-million dollar salaries for ministers. They are afflicted with the false consciousness of a belief in democratic values and the equality of individuals. You need elite (the cadres) who are sufficiently intelligent not to fall prey to false consciousness to understand why servant leaders need millions of dollars as remuneration. Hopefully the review board will be able to explain it to us shortly.
However the other parties inSingaporeclearly feel the same way as the PAP that democracy is a dangerous idea and power should not be entrusted to the ordinary members. Or they merely aspire to be the PAP and adhere slavishly to their ideas and methods-PAP LITE, if you will. Whatever the motivation, all of them maintain some sort of cadre system. The argument often given for the necessity of this is that it leads to “stability”. This is just another facet of the argument that democracy leads to gridlock and that the people are too short-sighted or stupid to exercise power responsibly. Even if a so-called extreme faction managed to be elected to the leadership, like the AWARE situation, ultimately democracy ensures competition. If the new leadership fails to reflect the will of its members or is unsuccessful at winning electoral office then it can be replaced.
It is genuinely worrying that so much of the Opposition shares the same mindset as the PAP. This begs the question as to whether their leadership are genuinely interested in change or representation or whether it is merely power that they seek.
To recap on what I said earlier, the only party that does not have a cadre system is the Reform Party. The RP is thus the only genuinely democratic party. Instead of a closed system, the RP CEC is elected by the Party Conference which is made up of delegates. Everyone, provided they fulfil basic criterion, gets a vote. As a result the Party is the purest expression of the will of its members. The Party Conference promotes a free market in ideas as any member can put forward a motion. As it forces anyone running for office to be responsive to the views of the members, it represents the implementation at the Party level of the principles we are fighting for at the national level. We refer to this as Conference being Sovereign. It is clear that when JBJ set up the RP he wanted to have nothing to do with secretive cabals and backroom deals and start a party that would exemplify the virtues of democracy. He learnt from bitter experience, when he was ousted as SG of the WP, how dangerous an unrepresentative clique is. In a way a genuinely democratic party was his legacy to the nation and serves as a model of what we need to see at the national level.
Many are scared away from joining the RP because of the lack of a cadre system which they feel makes it inherently unstable. Certainly its first three years have not been an easy ride. But if democracy itself is something we seek and value then a truly democratic Party is a necessity. As the RP is not a good long term bet for ironclad power, it is less attractive as an option to those who are power hungry or egotists. Why go to all that trouble to infiltrate a party to make it less radical, less viable as an agent of change, when you may be voted out in 2 years time and the Party may simply revert to its former state? This is what we saw happen with Aware. A group of women cleverly saw that getting like minded members in the organisation in sufficient numbers was key to changing its identity. But ultimately Aware was strong enough and its original ideology and had been in existence long enough to shake off that challenge.
No doubt many initially joined RP in error not clearly realising the ramifications of the democratic nature of the constitution. What a shock it must have been to them to realise that Conference is Sovereign and yes, they would actually need to get a majority vote from ordinary members to change the constitution and bring in a cadre system. How much easier it was to simply do a deal for power and leadership elsewhere in exchange for sabotage. And how much more effective to do it in collaboration with the State media, ever hungry as they are for dirt.
But here is the surprising thing. RP as an organisation , as Aware did before them, similarly survived with its democratic nature intact and went on to field 11 candidates in GE 2011. So maybe democracy is not the greatest weakness of a political party but its greatest strength in the long term. Certainly many commentators like Alex are now seeing the cadre system as responsible for hampering progress within the PAP and its greatest obstacle going forward.
What next in 2012? Well the PAP cadres have concluded their convention and business goes on as usual within their closed circles. There has been a lot of talk of Opposition parties joining forces in a grand coalition as well as of new parties being set up. However the important question for voters should be whether any of the parties are genuinely democratic. I would not wish the RP to merge with another party for example, unless that party were also to adopt a democratic constitution and abandon the cadre system. My fervent wish for 2012 is that any new party set up will be Democratic and that through openness and with competition fostering progress we will go forwards as a Nation and not backwards. We need to change the old Singapore/PAP influenced Model so that we can have a better future. As always I am daring to imagine a new rice bowl for an advanced Asian nation.
National Day 2011 Message from the Reform Party
Published: 9th August 2011
My Fellow Singaporeans,
Today we Singaporeans meet to celebrate our Nation’s 46th National Day. Today we can look back with excitement to a general election recently fought on a new political landscape. But today we must also look ahead with trepidation to challenging economic times on the horizon.
This election was exciting in many ways with the historic toppling of a GRC. But it also marked the introduction of a fresh political landscape for Singapore with the first new Political Party to enter the arena and contest an election in decades. With new and credible opposition figures coming forward as a result and with (almost) every single seat contested.
On National day it is common to look back at the journey we have taken and where we came from in order to measure how far we have progressed. Some of us were born and starting to grow up in the region before Singapore became a Nation. Others will have come here only recently. But most of us will be benefiting in one form or another from the hard work of the generation that founded Singapore through the sweat of their labour. Founding fathers like J.B. Jeyaretnam. JBJ, founder of The Reform Party, was the man who in 1981 first broke through a 16 year monopoly to give our Nation its first elected opposition Member of Parliament. He and the Singaporeans who voted for him put our Nation on the first rung of the ladder leading to true and fair democracy. A democracy and a way of government decreed in the National Pledge that will be recited today. A democracy still not realised.
JBJ often said that it was necessary to dismantle the GRC system, if we were ever going to break the stranglehold of the authoritarian (virtual) one Party state that is Singapore under PAP rule. In 1997 JBJ came close to doing it at Cheng San polling 45 % in a constituency where the Prime Minister felt it necessary to stand inside the Polling Station. That percentage of 45% was not bested until this year, 2011, with the historic victory at Aljunied. The length of time it has taken to topple that first GRC is a measure of how firm the PAP’s stranglehold still is and how far we still have to go before we have true and open debate in Parliament.
It is right to be proud of our success as a Nation but that hubris must be balanced with humility and we need to be ever mindful that not all of our fathers’ generation are able to retire in wealth and health. For every comfortably retired PAP minister with a lavish pension there are 100 ordinary, elderly Singaporeans facing daily financial hardship and a health care crisis.
When JBJ set up the Reform Party he broadcast in his inaugural speech the following message , “I appeal to all Singaporeans to cast off the slumber into which you have been led over the last 50 years, to wake up to your rights as human beings to your proper role as citizens of your country.” After his untimely death The Reform Party did not collapse but regenerated and to his appeal to Singaporeans to Wake Up! the Party added the appeal to Stand Up! By coming forward myself and standing I stated that my aim was to normalise democracy. I hoped to show by example that you did not have to worry that you would lose everything and be ruined for exercising your political rights. That ordinary and credible men and women could and should stand for public office if real change was to come about. That ordinary people needed to face down the climate of fear which has gripped Singapore since the PAP came to power.
And you did stand up. The 2011 election was the most exciting one for decades. It brought many new faces forward. Nearly 90,000 of you voted for The Reform Party, a new Party in its debut election, with a pioneering and sometimes difficult message. We were overwhelmed by your response and by the gratitude of an electorate who had been denied the opportunity of voting for so long.
However to this government it seems like business as usual. Despite 40% of you voting for change this translated under our rigged and gerrymandered electoral system into only six seats in Parliament for the Opposition out of 87. Before we get too excited about our new Parliament let us question why they do not feel the need to sit till October despite having gained the mandate in May. We are in the midst of a global economic crisis and our leaders are demonstrating breathtaking arrogance. No better proof could be given that Parliament is just regarded as a rubber stamp for the executive arm. The Reform Party wants to change this so that the actions of the government are held up to scrutiny by Parliament and the government is made accountable.
During the election campaign our leaders presented a report card to show how well they had done to justify their re-election. They spoke of a rosy economic future and the tremendous opportunities that lay ahead for Singaporeans. What really took the biscuit though was how they handed over a small proportion of the government’s surplus that year as a pre-election goody bag while paying Ministers and senior civil servants big bonuses. Despite the PM’s historic apology, and a few sacrificial victims who were due for retirement anyway, it appears that there is to be no real change in this government’s policies. And while the electoral system continues to deprive you of any real voice you will continue to get economic policies that are not in your interest.
Today we stand on the brink of a double-dip recession that I pointed out was likely some time ago. Singapore’s GDP fell last quarter and will almost certainly fall again in the current quarter which would constitute a technical recession. Today the government will continue to claim that the boom years are the result of the PAP’s wise economic stewardship and that the recessions to come are the result of global economic forces beyond their control. I have no doubt you will be reminded of the need to have a toughened hide in the future to take the risks of life with no safety net and to be grateful for the policies of ministers who may dance and sing on stage.
Minister Lim Hng Kiang said in May that the Reform Party was out of step even with the other Opposition Parties. And yet we have seen even the PAP now start to talk of Reform with a committee set up to review Ministerial salaries. Some opposition parties are now paying homage (belatedly) to JBJ with others picking up and subscribing to our pioneering message for pluralism, competition, accountability and transparency.
This National Day, do not be discouraged. The Reform Party was not out of step. We are just ahead of the times, living up to our name at the forefront of proposing better policies and now everyone is falling in with us. You have already shown the government that you are losing your fear and that you want things to change. JBJ told us that we have “rights as human beings” But he also reminded us that you have,” your proper role as citizens of this country.”
On this our 46th National Day we would like to extend our gratitude to all Singaporeans who have supported us over the last 3 years. You cannot shirk this role now and let things go back to how they were. Like long dormant shareholders in a company where an arrogant management has for too long had its way, it is time for you to wake up, speak up and even stand up. We are finally looking forward to emancipation 46 years after throwing off the Colonial Yoke.