It features articles that really touches me, like this short great read.

Yellowing soon?

The Economist points out another flaw in the 'morality' argument with regards to the salary. The implication of justifying high salary for the ministers with the point about attracting top talents and preventing corruption is that it seem to suggest that anything less would mean less able and virtuous state leaders, which obviously isn't the case.

My take on the whole issue has little to say about whether the adjustments are fair or if prevailing salaries are acceptable. And the point of bringing up the article from the Economist is to demonstrate the problem of the argument used.

So if white shirts turns yellow when you buy the cheaper ones, why don't we get other colours instead? Perhaps some day, people would find out that they can do fine with inexpensive light blue tee and just abandon the white ones.

Well, looking at the data on growth of GDP in Singapore, it is unlikely that the introduction of pegging ministerial pay to the private sector had any impact on performance of the economy though one could employ counterfactuals and suggest that we could have done worst without it. There comes a layer of complexity when we ask ourselves whether the motivation of these politicians/technocrats lies in serving the nation or earning a fat paycheck. There is no hard and fast rule about salary guidelines to prevent corruption of those in power though we do have management theorist who suggests that as long as we pay enough to get the issue of money off the table, workers would be able to concentrate on doing their job well. Perhaps the fact that people are in politics is supposed to shed light on alternative motivations?

A potential solution we should explore is for the ministers to bid their positions by making a wage offer to the public and providing their full personal histories and work experience details for the public to screen. The public could vote for the ministers; the top 5 voted candidates will be considered but the minister will be selected based on their salary bids. The lowest bidding candidate will be the minister, but his actual pay will be the higher of, either a 10% discount on the second lowest bid in the top 5, or his own bid. Given the intelligence of the candidates politics should draw forth, such a complex system should be able to attract only the brightest and best while allowing them to take a salary that they (and the public have 'agreed').

That is, of course, a joke. But the spirit of the mechanism is that we want the candidates to bare their motivations to the public and force them to give us a picture of what drives them. Then we'll decide if it's worth it to pay them that offer rate, based on their qualifications and the position in question. This also allows ministers taking on more difficult portfolios to receive a higher pay. Cabinet reshufflings will also be implicitly 'approved' by the public in this way. Best of all, opposition MPs are allowed to put themselves up for ministerial positions and the result would have taken into account public scrutiny of their qualifications, the salary they are going to be paid and also their personal incentives to take on the job - they gave the salary bid themselves so no reason they are going to say, now that's not enough for me.

Knowing the incentives of our political leaders are important. Soon after the news about the salary review recommendations were out, Grace Fu's facebook page status was:

"When I made the decision to join politics in 2006, pay was not a key factor. Loss of privacy, public scrutiny on myself and my family and loss of personal time were. The disruption to my career was also an important consideration. I had some ground to believe that my family would not suffer a drastic change in the standard of living even though I experienced a drop in my income. So it is with this recent pay cut. If the balance is tilted further in the future, it will make it harder for any one considering political office."

It drew forth loads of comments. It reflects how little we know about the true motivations and incentives of our politicians or how unconcerned we are. I think Grace is being really frank and objective here; we should empathize with her position. It is something very human to say and we really shouldn't think of our leaders as heroes who can make all the sacrifices in the world to lead our country. The whole pay issue is a tricky one, but we need to work towards making it less thorny.

Perhaps in a Singapore where our expectations for the future prospects of the country is not so dependent on the government; and that all the institutions are merely support and guiding structures for the private sector to take the lead, then we could relieve our leaders' workload while simultaneously relieving the taxpayers' burden of financing our leaders' salary. And perhaps we should work towards that; and for our government to prevent a crisis where we fail to balance between the 3 principles of the minister pay I've defined earlier, we probably have to transit our political system to one that takes more of a backseat in determining the future of our nation.

Galbraithian Wisdom

I've got some great quotes from John Kenneth Galbraith in his mid 20th Century book that bears great lessons for us even today.

Wisdom, itself, is often an abstraction associated not with fact or reality but with the man who asserts it and the manner of its assertion.

And after watching 'Inside Job'; you can't help but wonder if Galbraith's forecast turned out to be true for the SEC:

...regulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic and even intolerant. Later they mellow, and in old age - after a matter of ten or fifteen years - they become, with some exceptions, either an arm of the industry they are regulating or senile.

In any case, the documentary got me reading about some of the economist interviewed in the film. In particular, Glenn Hubbard and Frederic Mishkin were both caught a little off-guard in the film's interview by the director's questions. I thought that they handled the aftermath pretty okay (Mishkin here and Hubbard here). Obviously, the director had something he wanted the two professors to show to the audience and did portray them a little negatively but he did so to demonstrate a wider phenomenon as he justified.

From a human point of view, it is definitely easy to empathize with the director and it is what sells the movie. The policy difficulties and the way the crisis arose make it more difficult for the people in charge to agree with the director. There’s both a lack of certain (vs uncertain) information and cognitive bandwidth to process clues at the time before the crisis and during it. With the benefit of hindsight, the director is empowered to challenge the pre-crisis regime. Dommage pour le financiers!

Gliding on the waters

Best-selling Japanese novelist Haruki Murakami talks about talent, motivation and most importantly, hardwork in his memoir 'What I talk about when I talk about running'. This point was well highlighted by 99%'s article on the book. That idea that talent is a pre-requisite is compelling, and that belief puts you at a higher level than most other 'smart' people who have given up on the way and become 'mediocre' or just 'ordinary'.

I sometimes believe that majority of people in life sail through life this way. We are all born with gifts that takes time to discover and develop. As we go through life, we discard these gifts as we found them to be either overly taxing (too much time and effort required to bring us to the next level), or uninteresting. An environment that encourage and fosters these talents are necessary not so much to 'discover' these talents but to develop them appropriately. And inspirations are, without doubt, important too.

Scott Barry Kaufman discusses the importance of inspiration in the blog entry and suggests ways in which inspirations can be made to come by more often. I'm not sure how incredible this appear to our readers but we must acknowledge that no idea comes independently and originally from the guy who mentions it despite the attribution. The mind works in curious ways and we might have simply picked up cues from those around us to eventually arrive at whatever we've got.

In the Population in Brief 2011 (pity I didn't have such a reference material during those days when I was working on the research), it seems that fertility in Singapore has fallen even further but it seem to have stopped being such a big deal as the government internalized the social message at large, 'don't bother us with this matter'. There's even a line that says, "We recognise that getting married and starting families are personal choices and decisions." And in a typical Singapore-style bossiness that cannot tolerate inaction or lack of response to something deemed unsocial, it went on, "The Government aims to create a pro- family environment, through a comprehensive set of measures, including the Baby Bonus cash gift and co-savings, tax reliefs and rebates, as well as child care subsidies."

Up, up, up more slowly now...

In the latest LSE100 module which I recently completed, we explored the question, 'Is Population Growth a good thing?'. I was thrown back into a world I was familiar with from research and study of Human Geography back in High School. The Demographic Transition Model, Pro- and anti-natal policies, the 'development as a contraception' argument and so on. It was both interesting and somewhat annoying that themes in the discipline hasn't quite changed much. I guess the discipline is in itself shaped by the themes so I can't expect too much. But to consider population growth over a longer period and look at its dynamics from the perspective of the development of the human civilization and forward is interesting especially when you add technology, resource constraints and the notion of ideas into play.

And of course, more dramatically, the world just crossed a new milestone of having 7 billion people in the world - I remembered that the 6 billion mark was crossed some time in late 1999; my Geography teacher used so say that she and her geography class got the chance to watch the countdown (or count-up?) to 6 billion. More so than ever, we're all just another tiny soul wandering around the increasing crowded surface of our planet.

While 98% of people get a bit more satisfaction out of life (but not a lot) when their incomes rise, the remaining 2% are known as "frustrated achievers" — more money only makes them more unhappy, according to a team led by Leonardo Becchetti of the University of Rome Tor Vergata in Italy. Studying data on UK households, the researchers found that 70% of the frustrated achievers are female, and divorce is more common among this group than among the rest of the population.

Which brings me to the interesting idea explored in a public lecture in LSE last month; two professors 'debate' on the validity of using happiness as a measure of social progress rather than the 'traditional' indicators of income-measurements and development figures (mortality, access to services, nutrition, etc).

Indeed, happiness might often be relative and too often depends on context and circumstances. Our method of asking people if they are happy is as good as trying to measure the wealth of economy by randomly selecting people on the streets and then noting the amount of cash in their wallets. Too much of data relating to happiness is being missed out in the way it is captured now, making it difficult for happiness to be a measure of social progress though ideally, it actually serves as a good benchmark.

During my course on Microfinance (organized by The Student Initiative), I wrote an essay to conclude the course. It discusses the development of microfinance briefly and focused on the idea of expanding savings in the whole social enterprise of Microfinance. I covered the issue of financing of these enterprises and addressed the question of the future direction of the industry. It was interesting how this intellectual view connected with my personal experience on the ground when I went to Ghana.

Personal savings facilities did have a latent demand there. Previous experiences with micro-credit hasn't always been positive for the folks and they hope to reverse the financial equation and accumulate for investment rather than borrow to invest. These made sense to a certain extent: their proximity to poverty and sometimes subsistence lifestyle means that their access to money was limited; this made it difficult for them to repay loans when their investments pays them off in terms of crops and livestock that may not be readily liquidated (owing to price fluctuations in the market that may be in conflict with the repayment cycles). Accumulating savings and subsequently investing savings meant that there was less pressure trying to convert the non-monetary wealth back to money.

At Ekumfi-Ekotsi, where our brigade served, we designed a simple banking operation that the folks from the community can implement to accumulate savings to provide small, community-based loans as well as generate returns to finance community development projects. The focus was on savings and the incentives that these folks have for savings. We wanted to make the system simple for them to quickly see the benefits and save effectively. Our Microfinance Brigade even has a website set up on future recommendations for the brigades serving at the particular village. It included a report we've written to guide the future development of the fund. On the day before we left, there was 6 accounts set up with the fund and approximately 50 Cedis saved.

It was thus amazing that we later learnt that the number of savers went up to 200 when the next LSE brigade went down. They made it drastically easier for people to set up accounts by subsidizing the costs of passport-sized photographs required for account opening. And many more little workshops and marketing to promote the importance of savings. I attended the Global Brigades Student Leader Conference for Europe just last week and met a member of the brigade who was last serving at the community in late September - approximately 3 months after we left. The description of our projects progress was amazing; the folks at Ekotsi have almost internalized the idea of saving and using the fund as if that had been part of their lives all the while. There's now 350 savers and they garnered sufficient funds to start making loans.

I didn't get the chance to fully understand the current operations but the new savings products which I recommended did get implemented (way before the timeline I've laid down); as a matter of fact, the brigades had to move fast the execute ideas because there will be a period without any volunteers at the community and the committee of the operation will be pretty much managing it all on their own.

Perhaps we really did make an impact, with our ideas if not our work there. The model we created became the standard for Microfinance conducted by Global Brigades in Ghana. Granted, we adapted from the FUNDER model they came up with in Honduras and consequently, they are more receptive to our community-oriented, social benefits-driven model. It was still a fantastic success. Looking back, we're just a bunch of 9 foreign students in Ghana for 10 days after all.