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The rich are different to us…..they have more money



Yesterday I talked about the importance of democracy and inclusive political institutions to ensure inclusive economic institutions and prevent the adoption of policies that only benefit a narrow elite. These days one cannot pick up a government-owned newspaper or turn on the TV without  being told that PAP’s goal is to build an inclusive society.  However we will find it difficult to build an inclusive society whilst we continue to have non-democratic and non-inclusive political institutions.

The last few weeks we have been treated to tantalizing revelations about how important dynasties and family relationships are in China. In today’s FT there is an article about the downfall of Bo Xilai (Bo’s Downfall Sheds Light on Nepotism, http://www.ft.com/intl/cms/s/0/6be8993e-8962-11e1-bed0-00144feab49a.html#axzz1sUTm09iB). Both Bo Xilai and Gu Kailai are children of revolutionary generals and Bo’s father, Bo Yibo, was one of the “eight immortals” who ruled China behind the scenes in the 1980s and 1990s. Their other siblings all hold important posts in state-owned companies or have control companies that do business with the Chinese government. While Bo Xilai was the General Secretary of Chongqing his wife was a lawyer who set up and benefited from a number of business ventures both inside and outside China. In fact it was the threat that her financial dealings were to be exposed that allegedly led Gu Kailai to kill the British businessman Neil Hayward.

It is ironic that the Chinese Communist Party, which like the Soviet Communist Party, seized power with the tacit consent of the majority by promising to raise the masses out of poverty and eliminate inequality should be captured by a group of elite family dynasties.  Recently Bloomberg reported that the 70 richest delegates to China’s National People’s Congress were worth an aggregate of $89.8 billion, or more than a billion dollars each.

“In other countries children of politicians often get opportunities that others don’t but the problem in China is there is absolutely no transparency and there is also a strong sense of entitlement, that this money is their birthright,”   said one person with close ties to top political families in China.

“The problem for the Party is that exposing the Bo family businesses makes people realize that this is how it works for everyone.” (FT)

The importance in business of having family ties to or friendships with politicians is of course not a phenomenon that is confined to China. In Africa, Uhuru Kenyatta is reported by Forbes to be owner of Kenya’s biggest dairy company and one of Africa’s 40 richest residents. He served as deputy prime minister of Kenya and is the son of Kenya’s first president, Jomo Kenyatta. In the Mideast, the Bin Laden family made its riches through construction contracts for the Saudi government derived from the close relationship of Mohammed bin Laden and his sons with the Saudi royal family.* The former President of Egypt Hosni Mubarak’s family are reported to have accumulated a fortune of US$80 billion.  The family of the deposed Tunisian strongman are estimated by Al-Jazeera to have taken US$17 billion with them when they left the country while the Gadhafi family wealth is estimated at a seemingly implausible $200 billion by the new regime.

However one should not be surprised at this. After all non-democratic political institutions tend to be extractive and frequently serve just to maintain the power and privileges of an elite, whether a group of families as in China or a hereditary aristocracy as in Europe. A vicious circle develops in which dominance of  political power helps the elite to increase their economic power which in turn reinforces their political power. They have some interest in economic growth as long as it raises their wealth and they have to keep living standards for the masses either rising or not deteriorating enough to pose a threat to their rule. In this North Korea appears to be an exception, as the Kim dynasty is now into its third generation despite having reduced the bulk of the people to starvation and absolute destitution.

Here in Singapore “Inclusivity” will remain just another buzzword without  full democratic institutions to back it up.  As a former colony there was already a history of extractive political institutions.  The struggle to build new democratic ones was not helped by one party walking out and handing a walkover to the other so early in our post-independence history.

Our new buzzword should be transparency. While we have a Code of Conduct for Ministers that requires them to disclose their income, assets and liabilities to the PM upon taking up office – this does not go far enough. I propose that we need to  move to full annual public disclosure including the property and incomes of spouses and dependents. The same rules should be extended to senior civil servants, judges and senior management and directors of GLCs. This would only bring us in line with what public servants are required to do in democratic countries. For instance in the US, the Ethics Act requires annual disclosure of financial information by the president, vice president, members of  Congress, federal judges, presidential appointees, and other officials and employees earning at or above a specified pay-scale or with policymaking responsibilities. There are similar laws in Canada and many European countries while the UK has announced plans to make public ministers’ tax returns.

* http://dealbook.nytimes.com/2012/04/04/to-do-deals-nothing-helps-like-friends-in-high-places/

5 Comments »

  1. “I propose that we need to move to full annual public disclosure including the property and incomes of spouses and dependents. The same rules should be extended to senior civil servants, judges and senior management and directors of GLCs.”

    I am absolutely in favor of this proposition. If every thing is above aboard, there should be no fear of disclosure.

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  2. “I propose that we need to move to full annual public disclosure including the property and incomes of spouses and dependents. The same rules should be extended to senior civil servants, judges and senior management and directors of GLCs.”

    I am absolutely in favor of this proposition. This is a good example of what transparency is about. If every thing is above board, there should be no fear of disclosure. And that, I think, is a fair statement.

    Like

  3. I read your articles with great interest as it is very insightful and well written. However when I see your debates on TV, there is still room to present your ideas to the larger audience in a better way. This is also much needed when debating in parliament if you are elected. GE is still 4 years away, weaknesses can be improved and strengths can be further strengthen. Keep churning out new articles, I do look forward to them!

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    • Thank you Joan.
      Yes, I went into politics out of deep seated convictions and a realisation that more of us need to stand up for the opposition if we are to build a viable democracy. That means people standing up who are maybe not naturally born politicians and presenters. I actually think that so long as the convictions and the motivations for wanting to achieve democracy are in the right place the skill set can be learnt or acquired. Some people go into politics for the reverse reasons with all the speaking skills but no convictions. Democracy and parliament are safer in the hands of those who have the right internal motivations, a genuine desire to represent the people and an unshaken belief in democracy than in the hands of empty vessels which are all packaging and no substance.

      However despite not being a natural orator I don’t see anything to suggest that I won’t be up to the debate in parliament. The PAP don’t say anything that clever or unusual, they are stuck in a rut. Many of them got into parliament without a fight or without the polling booth even being set up. They certainly didn’t get in based on their debating skills. It is currently very frustrating to see the opposition in parliament keeping their heads down and losing the opportunity to debate vital issues and raise basic points. I must admit that I cringed when I saw the performance by some new MPs and NCMPs during recent ministerial salary and budget debates. The other thing about me is that I am unafraid. So you won’t see me cowering, at a loss for words and getting basic maths or economic principles wrong.

      I actually have never been on a live televised political debate. I was on “Talking Point” once but that was about three years ago. I was specifically blocked from the C.N.A English language televised forums during GE 2011 as part of a PAP strategy to keep me silenced across all of our Media and also to deny Singaporeans the opportunity of seeing how well I do debate. Before the blackout I had been in several debating forums at our Universities and they give a good indication of how I will perform in parliament.

      At NUS I seem to recall debating very successfully against Chris de Souza so I have looked up some links to that FYI. I did get a wild cheer from the audience when I answered De Souza’s question about the fear of a freak election result.

      This was reported in alternative Media as:
      Report on Political Dialogue @NUSS forum
      Christopher de Souza:” It would be a sad day for Singapore if a freak result happens.”
      Kenneth Jeyaretnam: “How could it be a freak result if it is the will of the people?”
      http://sgforums.com/forums/10/topics/415983

      The NUS magazine reported it thus:
      “Mr de Souza,however, said it will be a sad situation for Singapore and asked, if opposition parties contest the election not on the basis of forming a government, and are in by a freak result, then who is going to form the cabinet?
      Mr Jeyaretnam had the last word on that, “I don’t know how the will of the people can be expressed as a freak result.”
      http://www.nuss.org.sg/FileStore/pdfstore/Graduate2011Part1.pdf .

      However in the run up to GE all invitations to debate at our Universities were suddenly cancelled along with the Media blackout. One cancelled with only 24 hours notice when the PAP speaker suddenly withdrew and the University decided not to go ahead without him. So in fact most news about me is quite old and dates to before the Media and speaking blackout. I am of course often printed and quoted in the International Press. globally.

      Here is my speech at our last rally during GE 2011. My father, Mr Chiam and others have counselled me that it takes about three terms to get elected. I believe I have an important voice that needs to be heard to represent the true needs of the people .

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  4. I think this blog site is good to raise issues
    you are doing a great job bringing issues up for discussion
    with many insightful points.

    Like

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