Wolf Money(portfolio update for end May 2023)part 1
Meritocracy
The word “Meritocracy” came from a combine of Latin word for Merit meaning “Mereo”, “I earned” and cracy in Ancient Greek suffix “Kratia” mean “power or rule”. Combine it together it mean “I earned the right to rule” . The subject had been the focal point of the government recently. My commentary might not sit well for some but they are my general observation, no malice in my commentary.
Since our independence in 1965. We have set out on a course to be a meritocracy society. I give my government credits for closing the gap of the have and have not through education over the past 58 years. In recent years, at least in my impression, the door of meritocracy has been closing slowly due to a few factors.
Education
We were told all schools are created equally and all schools are good school. On infrastructure wise I have no disagreement but the brain and culture behind every schools are different. If all teachers and students are created equally we should have similar number of scholars across all schools equally in a year? Last year recipients of President’s scholarship had a similar education profile. 🤔 You see the flaw in those argument.
From my early days in Primary School the contrast can’t be much wider. I was in the school badminton team. In those days, there was no professional coach to guide us. The teacher without a portfolio of ECA was “arrowed” to teach badminton. The underperformance was glaring especially during competition. As what you would expect, the aftermath was ugly, I was schooled 15-0 15-1 by my opponent from that branded school. The branded school had the resources to engage a professional coach to teach their students the proper way of playing the game. A branded school with its armoury of resources from affluent parents and illustrious alumni(some ex national players), are able to direct resources to the school where its is most needed. Branded school had no problem attracting the best teacher to join the school simply by its established name. I do believe teachers have their own ambition. Human naturally like to be associate with a well known brand. Beside that ex teachers with their illustrious CV could opened up an opportunity for a tuition centre by the very same association. Business will be booming with parents queuing to sign up. I know some teachers have passion for teaching, some might even teach for no money. Would it be a better if one is able to undertake that passion and receive an accolade by teaching in a branded school?
The main reason for parents to put their kids in a “A” listed school is to create an environment for their kids to mix with kids from the same social background to help foster friendship among affluent families early on. If the kid is used to having friends from the same socioeconomic status that go to school in chauffeur driven car how can that kid show any empathy to those late comer who journey 1hr to school by taking public bus? Not easy. A fully booked country club to celebrate birthday with classmates showering the birthday boy the latest iphone and some kids struggling to save up for a basic computer for school work. The contrast can’t be greater. There was a program done by CNA about 3 years ago asking students from lower and higher socioeconomic status(ses)the most important factor to be rich? Kids from lower ses choose hardwork as the most important factor and knowing the right people was the most important factor for kids from higher ses. In the job market, it is also common for some mnc companies to recruit people through referral by internal staff. There is no doubt, knowing the right people is important. The survey doesn’t come as a shock to me, given if a kid is able to get into the world of A, R or St. branded school, he will be mixing with a cohort of potential future ministers, ceo, wealthy businessman, many future doctors and lawyers. If the parents are able to create that kind of environment, chances of the kid doing well in life just went up a few notches. It also explains why many parents went all out to create such an environment. I encouraged reader to view the CNA program to better understand my point of view. The link are as follows. https://youtu.be/_pDdd16XtIY
(Image credit : CNA)
Widening gap of education from my observation starts around the age of 3 where affluent parents can put their kids into branded preschool costing a hefty 3k a month, that might be someone else full month salary from a typical household, double that amount if there are two similar age school going kids. I am not associating price paid to quality but by charging a much higher school fees, branded pre school can give out better pay package to attract good and experience teachers to teach in their institution. Similar to the huge difference in pay package for big and small bank, you wouldn’t find Jamie Dimon working for First Republic Bank. I assumed some but not all teachers had ambition to climb the organisation’s ladder that come with a higher pay and a stepping stone to better career prospect. Btw teachers have bills to pay too.
In secondary or JC, it is not uncommon to hear students from branded school spent 3k monthly on private tuition. The ability to spend big on education privately is a huge advantage. Some of the best students from neighbourhood school struggle with their academic result in JC due to the high standard of competition in branded school after they got enrolled through their own merit via PSLE O level.
Parents from affluent background can simply buy a house within 1km or pay a 30 months lease for an apartment within 1km to get a higher chance of securing a place in that well known school for their kids which most other parents couldn’t. If nothing is done, we will have a divided Singapore where people of same ses would only mix with people from same ses. That is dangerous for the harmony of our society if left unchecked can create a political undercurrent for the ruling party. The “have not” will eventually cast their votes in protest due to perceive lack of opportunities and inequality.
Scraping the Alumni advantage for P1 enrolment can be a game changer. The Alumni scheme is somewhat anti meritocracy. Should any Alumni family members had a bearing on whether the kid get into that particular school? I don’t know. Of course it’s is very difficult to give up the old boys or old girls club memberships for those who had a vested interest, everyone want their rights preserved. Another suggestion to make it a more level playing field by widening the 1km rule to 3km that help open up more equal opportunities for others living in heartlands outside of that affluent neighbourhood.
Having a buddy system program, students with good results from higher ses to mentor a student from a lower ses. That mentorship program earned cca points.Government can provide full subsidies on education and related expenses for students from underprivileged family from the age of 3 onwards to end of tertiary education. A 2 years education in K1 and K2 is inadequate to prepare any kid for primary school. It is not uncommon to find some P1 kids struggle with basic reading. The education gap is huge. The government had recently focus on families which had not send their kids for pre school education by the age of 3. It is a good move by the government but more can be done.
Market pricing system
If we let every things goes through a market pricing mechanism, we wouldn’t need a government. If Adam Smith’s invisible hand are allow to do its magic in the economy without constraint, there would have been more revolution in many countries. Without government intervention, the society will disintegrate. The policy of letting market set its own price is useful up to a limit especially in a small country like Singapore where resources are scarce. We have no greater hinterland to escape from high inflation, basically what you paid in the east would apply in the west. The government intervention is important in some aspects. One example is letting market set its price for hawker stalls tender. Hawker stalls used to serve good food at very affordable price partly because the first generation of hawkers were issued hawkers stalls at only a few hundred dollars rental per month. With lower rental, hawkers could charge a lower price for their food and still make a decent living. When the government start tendering out hawker stalls, it had an impact on food price sold in hawker centre. It is not uncommon to hear a hawker stall in a popular hawker centre won a tender for 6k per month. It had an impact on food inflation. Hawker centre is an important social fabric. Hawkers centre is such an important social institutions where most Singaporean get their daily meals. I would suggest going back to direct awarding of hawker stalls to keep operating cost low and also to attract new blood into the hawker trade.
The hot button issue of 120k COE is slash all over the paper and social media. The policy of market pricing for COE had a negative impact on those who need a car or a motorcycle to make a living, making it out of reach. Not all people who need a vehicle is rich. There are people in our society having a genuine need for personal transport. The recent increase in COE number is unlikely to reverse the high COE trend as Singapore is a small country where we can’t have perpetual growth in car population. Those people who could afford to buy cars, could even make money out of the system. Owning a car had become somewhat “elitist”. It is the only country on earth where a car could be sold for profit after a 2 years usage. With rising COE, it had much impact on cost of goods sold with transportation costs and delivery cost going up, businesses are force to charge more and consumers having to pay more. High inflation ultimately and indirectly affect social mobility among low income having to pay more for essential services rather than putting more into education or a down payment for the purchase of a flat. A cycle of social underclass occured. I suggest every household should be entitled to buy one non transferable COE at a fix rate at half the current COE price to ensure those who are in need of a car can have access to a car or a motorcycle subject to mean testing. You might be thinking that will cause a huge demand for vehicles?Not necessarily as the non transferable COE will act as deterrent since there are no monetary incentives derived from sale of vehicles. People would still have to consider the huge running cost of owning a vehicle. Those who are rich enough to get a second or third car, the taxes will be double or triple. The revenue loss is a small price to pay for policy makers than losing the right to govern. Food for thots.
There are issue surrounding pricing of bto flat base on market valuation, very happy if you are the seller of a HDB flat but it can be a daunting task for new couple setting up a family. Singapore public housing is unique from other social housing in other countries where flats are sold. Maybe some form of cheap 5 years lease with the option to buy can be consider by the government.
Land Reversionary Interest
I have seen more developers selling their freehold land for 99 leasehold status with them keeping the reversionary interest. The reasonableness for government to undertake those 99 years government land sale with reversionary interest due to the need for future tax revenue consideration is justifiable but I am not sure why private developers are able to alter the status of the freehold land, selling them as leasehold land with reversionary interest. Those who born out in the “correct family” would be guaranteed perpetual wealth for generations to come. The abolish of this rule is long overdue. Who made the most money from the recent Hari Raya bazaar? Your guess is as good as mine. The landlord.
The importance of meritocracy is the ability for everyone to dream big and achieved success base on their own merit. Anyone from any background, race or religion and especially those from humble background must be able to see hope at the end of tunnel, they could one day succeed base on their own merit and ability. It will be sad to see, those having good ability are cast aside because they don’t have a strong enough connection. If those getting the top jobs are base on how powerful their connection is, Singapore will be a dead duck in the long run. Meritocracy is a heavy subject. Meritocracy can’t be left alone without the third hand of the government widening the space for meritocracy to strive. It also call upon the privilege group of our society to give up some of their entitlements. For people with abundance of wealth, one is accord with the best possible start in life. Ability to have access to huge capital is a big advantage that attracts the best opportunities in business, social and education which in itself is a powerful enough advantage for anyone to have. The concern of most parents are real, would my child be able get the same opportunity as we do? Only time will tell.
Part 2 will be coming up shortly.
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