The problem with the national conversation: information asymmetries

Dear friends, as long as there are significant information asymmetries in the government-citizen relationship, Singapore will never be able to have a completely fair and open national conversation.

What information asymmetries exist? Simply, the government has all the data and information, and we, the people, are given only selective access to it. Whenever people talk about the “lack of information” or the need for a “freedom of information” act, it is difficult to grasp what precisely this means in practice, and why exactly we need it.

Hence, in my humble bid to shed some light on this problem, I will adopt the same approach as I did last year, when I wrote a piece entitled “The problem with Singapore’s media“, showing six clear examples of institutionalised bias in Singapore’s media.

Here, I will show three clear examples of how the Singapore government’s stranglehold over data has blunted my ability to function as an analyst and journalist, preventing me from writing transparently, undermining the richness of any dialogue I can hope to promote through my writing.

If you’d like to cut straight to the three examples, please click here. But, if you are keen on some discussion on information asymmetries in society, then do read on.

Information asymmetries

“In economics and contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry, a kind of market failure in the worst case.” 1

Information asymmetries can lead to several “market failures”, including adverse selection, moral hazard, and principal-agent problems.

“Adverse selection” is best demonstrated through the market for second-hand cars. Sellers know exactly how many times they’ve spilled coffee or burnt rubber on the cars they’re selling. Buyers don’t. Sellers of lemons are more likely to be bargained down than sellers of good cars. At any given price, it is more likely that a lemon than a good car is going to be sold, to the detriment of buyers and sellers of good cars.

“Moral hazard” pops up frequently in the insurance industry. Insurance firms assume all 26-year old drivers are the same. But Speedy Gonzalez assumes that once he has paid his insurance, he can drive how he wants because somebody else will cover him. If the insurance firm could have identified the Speedy Gonzalezes beforehand, it would have raised their premiums.

“Principal-agent problems” occur when the interests of the “principal” are not aligned to those of the “agent” who represents the principal. These issues are commonly discussed in terms of corporations. The company owners (principals) hire managers (agents) to run the firm. But the managers (agents) make decisions–bigger bonuses, more Club Med retreats–that might not be in the interests of the owners (principals), who are keen to maximise profits.

Everyday information asymmetries

Consider the doctor-patient relationship.

“The asymmetry of information makes the relationship between patients and doctors rather different from the usual relationship between buyers and sellers. We rely upon our doctor to act in our best interests, to act as our agent. This means we are expecting our doctor to divide herself in half – on the one hand to act in our interests as the buyer of health care for us but on the other to act in her own interests as the seller of health care. In a free market situation where the doctor is primarily motivated by the profit motive, the possibility exists for doctors to exploit patients by advising more treatment to be purchased than is necessary.” 2

Errrr, Susan Lim?

Many information asymmetries also exist in the financial services industry. Given the drama we witnessed in 2008, it’s fitting that we look at collateralised debt obligations (CDOs) in the American mortgage market. Perhaps the most famous example of an information asymmetry being exploited is when John Paulson, a hedge fund manager, allegedly influenced the composition of a Goldman Sachs CDO and then bet against it. In other words, Mr Paulson helped choose some really shitty mortgages that went into a bond which was then sold off to investors. The investors thought it was gold. Mr Paulson knew it was crap. And he made money off that trade. (Of course, he could have also lost money if the value of those subprime mortgages kept rising.)

Closer to home,  we have the Lehman Brothers Minibond Saga, where Singaporean financial institutions were accused of having mis-sold products; ten of them had penalties imposed. The mis-selling was possible only because of an information asymmetry: the sellers of the financial products had more information–i.e. understood the risk-reward profile better–than the buyers, many of whom were inexperienced elderly investors.

Information asymmetries in government-citizen relations

Government-citizen information asymmetries can lead to principal-agent problems. Elected politicians are actually the agents who are chosen to act on behalf of the principals: the voters, the people, the citizens. But these agents (politicians) may not always be acting in the best interests of the principals (voters).

Why would governments want to hide information from citizens? It usually relates to elite protection. People in positions of power, in their bid to retain their status, can go to great lengths to hide and massage data and information.

A country’s political system influences its approach to freedom of information. On one side of the spectrum we have the most information-biased country on the planet: North Korea, a brutal totalitarian, military dictatorship. On the other, we have liberal democracies, such as the US, which not only have Freedom of Information acts–including systematic declassification of secret government documents–but also have assertive, independent media outfits that relentlessly hound the government for data and information.

However, it would be wrong to conclude that the countries with the most liberal information agendas are the ones with the most politically aware or enlightened populations. As much as there is information, there is also mis-information. Vested financial and political interests regularly  manipulate the media in ostensibly open, democratic systems. That is the reason why many Americans believed that Saddam Hussein was responsible for 9/11, and why many of them today believe that President Obama was born outside the US.

Hence, even in countries where there is freedom of information, one might argue that the informational outcomes are not always optimal from the principals’ (voters) point of view. There are many other factors that matter, including literacy and media quality and diversity. If you’re keen to read more about information control and media manipulation, do refer to the work of Noam Chomsky.

Nevertheless, all other things being equal, it is in the interests of principals (voters) to demand greater information access from their agents (government); with a few possible caveats, related to national security. Yet, even then, according to Mr Chomsky in this video on freedom of information,

“If you look at the declassified records, you find very little material that has anything to do with national security or the defense of the country. What you find mostly is the need to defend the government against its own population. Most of what’s there, they just don’t want you to know, because it harms power.”

What are some other countries that have Freedom of Information Acts? According to Wikipedia,

“President Pervez Musharraf promulgated the Freedom of Information Ordinance 2002 in October 2002. The law allows any citizen access to public records held by a public body of the federal government including ministries, departments, boards, councils, courts and tribunals. It does not apply to government owned corporations or provincial governments. The bodies must respond within 21 days.

In Germany, the federal government passed a freedom of information law on September 5, 2005. The law grants each person an unconditional right to access official federal information. No legal, commercial, or any other kind of justification is necessary.” 3

Where does Singapore sit on this government-citizen information continuum?

Although some government critics have in the past (ridiculously) put Singapore and North Korea in the same sentence,  in terms of information, we are actually much, much closer to the US or other Western liberal democracies than we are to totalitarian states. Nevertheless, there is still a lot of information that the government keeps from us–let me describe the three instances of government agencies rebuffing my requests for data and information.

Note: As with my earlier piece on the media, I will not be revealing the names of any of the Singapore government officials I communicated with. This article and argument has absolutely nothing to do with them; it is simply about the system and structure that we all have to operate within. In fact, all of them were quite cordial and prompt in my discussions with them, and were simply following orders–or, perhaps, as often happens in any hierarchical organisation, they were erring WAY on the side of caution. Not empowered to make big decisions, so they “cover backside”, and turn me away.

Here are the three incidents:

1) Secretive population data Part I

In November 2009 I was working on a piece for The Economist looking at immigration and its impact on Singapore. You can read my final article here.

As part of my research for the piece, I wanted to find out the ethnic breakdown of three groups of people: the “Permanent resident population”, the “Non-resident population”, and the “New citizens (i.e. not born in Singapore)”?

Why did I want to know the ethnic breakdowns? Simple. I wanted to see if Singapore’s immigration policies were giving preference to any particular nationality or ethnic group. Some HR personnel and small business owners had told me, for instance, that it is much easier to bring in Chinese from China, Malaysia and Indonesia than it is any other person on this planet.

I wanted to find out if this is true, partly because then it might explain some of the irritation in society with service staff who speak only Chinese. ““I am Singaporean and tired of service staff who can only speak Mandarin” is a group on Facebook, the social-networking site, with more than 10,000 members,” I had written three years ago.

So I asked the Population Statistics Section at the Singapore Department of Statistics. The only data point it offered was “Permanent residents by ethnic group, 2000”. This was its reply: “We are sorry to inform we are unable to provide further breakdown of the permanent residents and non-residents for the other years requested.”

As soon as I read this, my mind started racing. Why wouldn’t the government want to share ethnic breakdowns of migrants? Was the situation really so serious, i.e. has Singapore really been drastically changing the composition of its population? I still don’t know.

I also asked the newly established National Integration Council (NIC): “How many Singapore citizens are Singapore-born, and how many are foreign-born?” This would allow me to properly consider the extent of the “integration” challenge facing the NIC.

I was foolishly assuming that the NIC would be happy to share this data. After all, if its mandate is to promote integration, surely it has to know how many foreign-born people there are in our country? And surely it would want to inform the people in the country so they are aware of all the other wonderful people in the country?

Well, no. As you will read further below, that was the first but not the last time the government did not want to share this bit of information with me. Again, my mind started racing. Why does the Singapore government not want Singaporeans to know how many foreign-born citizens are in the country?

2) Secretive education spending data

Earlier this year, the Economist Intelligence Unit (EIU), where I work, published a research report comparing preschool education around the world. I was the editor of the report. After the report was completed, I wanted to write an Op-Ed for The Straits Times on preschool education in Singapore. You can read the Op-Ed here.

Just to rewind a bit–when the EIU was conducting its research for the project, we had asked each of the 45 countries we studied to provide us with data on “Government spending per relevant-aged child”, i.e. how much public money is being spent on children below the age of 7. For every other country, this is public information. Not here–in Singapore, this data is confidential.

Singapore’s Ministry of Education (MOE) had very kindly agreed to let us have the data purely for the purposes of building the model, i.e. we could use it in our benchmarking of the 45 countries, but were not to publish it publicly.

OK. I had initially thought this was because MOE, for whatever reason, did not want this info being disseminated across the world. But surely MOE would consent to publishing it in the local newspapers, for Singapore citizens to understand the state of preschool education here?

Well, not really. The official at MOE told me not to release this figure to The Straits Times. So, as you will see in my Op-Ed, I had to dance clumsily around the fact:

“In terms of government spending per year on each relevant-aged child, exact figures for Singapore are not available, but it is understood to spend less than Norway does (US$7,620 in PPP terms), and less also than countries such as New Zealand (US$4,329), Japan (US$4,029) and Poland (US$2,635).”

From a journalistic point of view, this creates confusion. Any reader who reads the above statement will ask: So, what exactly does Singapore spend? Is it US$2,500? Or is it US$500? This loss of clarity is to the detriment of all parties involved.

From a citizen’s point of view, you are probably asking yourself the same question I did. In an article in a Singapore paper, why is it that we Singaporeans are not allowed to know how much of our tax money is flowing into preschool education? Not only that, what makes it more galling is the fact that we do have the information to discuss all the other countries’ spending amounts. But not ours.

Why does the Singapore government not want Singaporeans to know how much it spends on preschool education?

(Note: Even though I learned about all this during the course of my work, there is nothing confidential here. I did not discover all this because of any privileged access. Anybody who is interested in preschool spending in any of those 45 countries would have found out exactly what I did.)

3) Secretive population data Part II

The most recent brush I had with government information intransigence was last month, when I was doing research for a piece entitled “The End of Identity” that I intended to publish on the IPS Commons site.

In order to get a better grip on Singaporean identity, I wanted to know what percentage of citizens were born in this country. Essentially, the same question I had asked three years prior, but coming it at from a slightly different angle.

This time, I was actually much more optimistic about getting a straight answer from the government. At a macro socio-political level, from 2009 to 2012, there have been quite significant changes in this country, as Singapore’s political space has opened up. In particular, it seemed to me that the government is trying to be much more consultative, and engage citizens like myself in conversations and dialogues. At a more micro level, I was buoyed by the setting up of the National Population and Talent Division (NPTD), which sits under the Prime Minister’s Office. The NPTD was some proof, I thought, that the government is taking the population issue seriously.

Perhaps most importantly, the NPTD had recently rolled out a population “Issues paper” with a big song and dance, with the specific aim of “engaging the public extensively this year to hear their views, because we think it’s an important issue that affects all of us,” according to an official at NPTD.

Finally! Now I can ask the NPTD all my burning population questions that will help me write my pieces.

Well, not really.

As it turns out, the NPTD only wants Singaporeans to discuss certain population issues, not others.

After almost one week of mulling what to say to me, amid numerous conversations with a Corporate Comms person there, this was its official reply: “The number of Singapore citizens, as at Dec 2011, is 3.27 million. We do not provide a breakdown in terms of local-born or naturalised citizens, as we regard them all as Singaporeans.”

From a journalist’s point of view, this whole process of information gathering can be quite frustrating. First, I have no idea about whether I’m going to get the data I need. Second, my piece gets held up for a week, as the government spin doctors whir into action. No big deal in this case, since many people ultimately got to read it. But it still rankles.

Third, there is again loss of clarity, to the detriment of all parties.

This process of government obfuscation, which then leads to journalists having to come up with rough approximations, which then leads to readers having to wonder what the truth actually is–is this the kind of National Conversation we want to have?

Is the NPTD interested in a genuine engagement or is its main purpose simply to communicate the government’s population policies to the people of Singapore?

And, to ask the same question that bothered me three years ago, why does the Singapore government not want Singaporeans to know how many foreign-born citizens are in the country?

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Conclusion: What kind of a national conversation do we want?

Let me sum up with a few points. First, when faced with requests for Freedom of Information, a frequent government retort–not just in Singapore, but the world over–is that “there are national security concerns”. If anybody ever mentions this to you, dear reader, I’d appreciate if you can point them to the above three examples. I can’t wait for somebody to explain how spending on toddlers is a national security concern.

Second, to reiterate, I do not think there’s any point haranguing Singaporean government officials (i.e. civil servants) who refuse to provide data or information. They are trying to do the best possible job given the constraints they face, just like journalists in mainstream media outlets. We have an institutionalised problem that needs to be addressed.

In fact, I think the government officials’ jobs would be much easier if Singapore had a Freedom of Information Act. Then they wouldn’t have to spend time wondering whether to respond to requests from people like me. They could just get on with their work. Do note that data and info is not transparent even within the govt. According to my public sector friends, there is often a problem with government units hoarding information and hiding it from other government agencies.

A Freedom of Information Act would help us all. Note that, according to Wikipedia, “A basic principle behind most freedom of information legislation is that the burden of proof falls on the body asked for information, not the person asking for it. The person making the request does not usually have to give an explanation for their actions, but if the information is not disclosed a valid reason has to be given.”3

Even if a Freedom of Information Act is politically unworkable in the short term, I am sure there are other ways to free up the mountains of data and information that citizens want access to. Perhaps we can set up a separate “Information office”, or Ombudsman of some sort, with the authority and mandate to get other government bodies to release information to the public. I’m sure there are other problems around this, but it’s high time we considered all our options.

On a related note, I am not even sure Singapore’s most senior politicians are happy with the status quo. Some may be, of course, but there are others who might see the value in sharing data and information–like those in the 3 examples above–with the general public. This can improve the quality of public discourse and ultimately policies. But, as with any huge, hierarchical bureaucracy, not every intention at the top gets passed down the chain of command swiftly. It is entirely possible that the foot soldiers are slightly out of step with the generals.

Earlier this year, Teo Chee Hean, the deputy prime minister, got a lot of stick for asking students “What do you think?” in response to some tough questions. While it would have been nice for Mr Teo to offer more concrete opinions of his own, part of me agrees with him. It is important to ask Singaporeans what we think. (It’s also important to listen and absorb our responses.)

This is largely because of the increasing complexity of policymaking and economic development. In a modern, knowledge economy in an open, globalised world, information and knowledge exists in disparate pockets everywhere. “What do you think?” has arguably become a much more important question than at any point in our history.

But it’s also important for Mr Teo to remember two things. While it is good to ask “What do you think?”, the PAP should do so with a dose of humility. One of the main reasons Singaporeans assume that we do not have to think and contribute to policymaking is, well, for decades the PAP told us NOT TO.

“They say people can think for themselves? Do you honestly believe that the chap who can’t pass primary six knows the consequence of his choice when he answers a question viscerally, on language, culture and religion? But we knew the consequences. We would starve, we would have race riots. We would disintegrate.”
– Lee Kuan Yew, The Man & His Ideas, 1997

The second thing Mr Teo should understand is that as long as there are significant information asymmetries in society, Singapore will never be able to have a proper national conversation. And we the citizens will never be able to “think” as well as we should.

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Dear friends, in my book, Floating on a Malayan Breeze, I discuss in further detail several of the issues that crop up in this essay: the Malaysian and Singaporean governments’ control over information, and scripting of our national history; Singapore’s population policies; and our approach to ethnic composition, and the supposed preference for Chinese migrants.

If you are in Singapore, please join us for my book launch at 8pm, September 26th at the Esplanade. Do RSVP to Riya at orders.nuspress@nus.edu.sg if you’d like to come. Please click here for more details of the launch.

Also, the book itself will be available in book stores in Malaysia and Singapore very shortly. Look out for it! Or to buy on Amazon, click here.

References:

1 Wikipedia: http://en.wikipedia.org/wiki/Information_asymmetry

2 http://oheschools.org/ohech3pg4.html

3 Wikipedia: http://en.wikipedia.org/wiki/Freedom_of_information_legislation

Photo credit: Derek Midgley’s photostream

Book interview: The Kent Ridge Common

Dear friends, a student reporter from The Kent Ridge Common, an independent online publication run by NUS students and alumni, came to interview me the other day. In his words, we “chatted for a little over an hour about everything under the sun, from education to economics, from interests to career.” Please click here to read the interview.

Our work at The Economist Group

Many people, particularly in Singapore, have asked me what exactly happens at The Economist Group, both globally and in the Singapore office. I think this is partly because quite little is known about the people behind The Economist, our flagship “newspaper” (most of the public calls it a magazine), since there are no by-lines on articles. But it’s also because we are a very small organisation, both globally (<1000 people) and in Singapore (30 odd employees).

The other, more Uniquely Singaporean reason, is that few people in Singapore get to meet journalists who are not on the government payroll.1 So our experiences with journalists, and media organisations, are much more limited than in other vibrant economies. The common assumption is that Singaporean journalists write only for Singaporean outlets. But there are a few of us who work at foreign media companies. So I thought it might be a good idea to describe our work for those of you who are interested.

First, though, I wanted to share one of my highlights from the past six years working at The Economist Group. Nothing editorial, a bit quirkier, but arguably of greatest personal and societal significance. Dan Martin (right), Tony Nash  (centre) and I decided to run in the 2010 Standard Chartered (Half) Marathon to raise money for Sanctuary House, which provides foster care for kids in Singapore. It helps to provide care when parents are in jail, when they’ve been temporarily stripped of their rights by the government for things like abuse or mental incapacity, or when adopted kids need to stay with someone until their new parents can take them. Thanks to the support and generosity of our colleagues and friends, we managed to raise S$15,238. Even better, The Economist Group matched every single dollar. So, we ended up giving more than $30K to Sanctuary House, which hopefully helped a lot of kids.

Before describing our actual editorial work, it’s worth mentioning that there are two main units within The Economist Group. The biggest is The Economist itself. Most people know The Economist newspaper, but other publications that sit alongside it include “The World In..” and “Intelligent Life”. The second biggest is the Economist Intelligence Unit (EIU), where I work. The EIU provides macroeconomic, political and business intelligence (research) mainly to corporations, but also to other organisations, including NGOs and governments, around the world. Aside from The Economist and the EIU, there are some other smaller units, such as EuroFinance and CQ Roll Call, that are part of The Economist Group. In terms of ownership, The Economist Group, a privately-held company, is 50% owned by The Financial Times, which is owned by Pearson. Employees own a large chunk of the other 50%.

Though there are many similarities between the two units–The Economist and the EIU–there are some important differences. First, editorial is independent and separate. An example of what this means in practice is that it is possible that The Economist predicts a Romney victory while the EIU predicts an Obama victory. No contradiction in this fictitious example. Second, our target audiences are different. The Economist is targeted at the mass intelligence market, i.e. people. The EIU’s main audience comprises companies, governments and other organisations. That said, some of the EIU’s stuff, for instance the recent report on preschool education, garners a lot of attention among the general public.

What exactly do I do? I will start with my official job, before describing some of the contributor and freelance work that I’ve done within the Group. From 2006-2010, I worked at the Economist Corporate Network (ECN), which is a senior-level advisory service, i.e. Economist editors/economists organise roundtable sessions for C-suite execs and share our thoughts on business, political and macroeconomic developments around the world. I really enjoyed my time here: I learned a lot about Asia, the global economy, politics, policies, governance, issues that businesses in Asia, but particularly South-east Asia, face. Got to meet lots of interesting people working in Singapore. Got a lot of experience making presentations on politics, business and macroeconomic issues, in front of 60-year old CEOs. And, most importantly for me given my dream of being a writer, I got a lot of training in writing, most notably from Graeme Maxton and Justin Wood. Unfortunately, I can’t share examples of my work here as it is all only for ECN members.

From 2010-today, I’ve been working at the EIU’s Industry and Management Research Unit (aka “Sponsored research”; aka “Thought Leadership”). Companies and organisations commission us to conduct large pieces of research that are then published publicly. Thus I have had to spend my time writing, editing and managing these giant research projects, some of which take 4-6 months to complete. Some projects I write; others I edit. Just depends on the topic and staff availability. To be clear, for each of these projects, I am just one of a team of editors/economists/statisticians/designers pulling it all together. Though challenging, the one great thing about this job is that it allows me a deep-dive into many different topics over the course of a year. Tons of intellectual variety.

There are many different research pieces that I think may be of interest to the wider public, and you can view them all at our Management Thinking site (click here). The two that received a lot of global media coverage recently are the pieces that we did on Global City Competitiveness (pictured) and on Global Preschool Education. As a Singaporean, it made me quite proud that both these influential global pieces were conceived and largely executed in Singapore. As mentioned, we had a big team working on both, including my colleagues at Custom Research who built the large, exhaustive, complex Indices. My role was editor of the reports.

Finally, contributor work. One of the great things about the Economist Group is that many of us have the opportunity to freelance and contribute across the entire Group. This can involve making presentations to moderating discussions to, of course, writing. This not only adds a lot of variety to our day-to-day job, it also helps boost our income–we typically get paid as freelancers. In other words, when The Economist commissions me to write an article, they treat me the same way they might an external contributor, even though I work for the sister company, the EIU. So, we don’t get any special favours. We have to prove ourselves the same way. But we also get paid a little bit when we deliver.

Though I have freelanced for many parts of the Group, I will just discuss my work for The Economist, because that’s what people often ask about. Also, I can’t really share my other work as it’s not published publicly. As you might imagine, given my dreams of being a writer, publishing my first piece for The Economist was really quite thrilling. I remember the day, January 17th 2009, and the Cover–all the more since my hero Obama was on it (pictured). Mine was a piece entitled “Muting the messengers”, and was about Vietnam’s crackdown on the press (click here to read). The final copy bears only a passing resemblance to what I submitted to our then Asia editor, Simon Long. Haha–but that’s part of the learning, I suppose. 🙂 (Incidentally, Simon is now our Asia columnist, Mr “Banyan”, and is one of the reviewers of my upcoming book on Malaysia and Singapore.)

The piece I am most happy about is something I wrote on the AWARE saga (click here to read). This time, my copy wasn’t edited much, i.e. I had done a better job. Simon and some of the other journalists told me they really liked it. As part of the research, I interviewed Braema Mathi, a former AWARE president, as well as Alex Au, who those of you in Singapore will know well, Mr Yawning Bread.

So that’s about it. It’s been really fun seeing The Economist Group grow in Singapore. When I joined in 2006, we had about 20 employees. Of those, there were two of us in Editorial–i.e. people producing content–my British boss, Justin Wood, and myself. The rest of the staff were in Sales, Marketing, Admin and support functions, e.g. IT.

Today, there are some 30 employees in Singapore. Of those, there are now nine people in Editorial. Of the nine, five of us are Singaporean.

In other words, over the past six years, The Economist Group has shifted more editorial responsibility to Singapore, i.e. there is more content being generated here. And, there are many more Singaporeans responsible for that content. That makes me happy as a Singaporean, and also as an employee–The Economist Group is in the midst of a long transition away from being a British-heavy organisation to being a truly global one. Hopefully it doesn’t lose its dry British wit.

UPDATE: I left my job at The Economist Group in April 2013 in order to focus full-time on writing my second book. Please read my blog-post, Goodbye full time, Hello freelance.

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1 A senior Straits Times journalist who I know does not agree that Singaporean journalists are “on the government payroll”. Fair enough. I was just being a bit cheeky. Singapore Press Holdings (SPH) is a public company, though it is controlled by Temasek, our sovereign wealth fund, through a rather byzantine web of government-linked companies. The government also has direct control over SPH’s management shares. You can read more at this article published by the World Bank. (Some silly accusations there, but some interesting points too). Mediacorp, our other media company, is 100% owned by Temasek. So, if I wanted to be perfectly accurate, I should say that all Singaporean journalists are on the payroll of Singapore’s sovereign wealth fund. In some shape or form.

Tackling preschool challenges in Singapore

The Straits Times, July 20th 2012

Improving Singapore’s preschool environment can, over time, help to boost birth rates, reduce social inequalities and better prepare people for work in a knowledge economy.

These are some of the findings from a new report, Starting Well, published by the Economist Intelligence Unit and commissoned by the Lien Foundation. The research ranks the preschool environments in 45 countries.

Singapore ranks 29th, below countries such as Chile (20th) and Greece (27th). The Nordic countries top the ranking, with Finland (1st), Sweden (2nd) and Norway (3rd) rated as having the world’s most inclusive and high quality preschool environments.

Singapore’s poor showing in the report has provoked debate. A closer look at the findings suggests areas for improvement.

The index scores countries across four categories: “Availability” (25 per cent of total), “Affordability” (25 per cent), “Quality” (45 per cent) and “Social Context” (5 per cent). Singapore performs well only in social context, which looks at the broader socio-economic environment for young children, including their health and nutrition levels.

Singapore ranks 25th in terms of availability, largely because it has no legal right to preschool education. A legal right does not imply it is mandatory, but simply that government has an obligation to provide it to those who want it. The research argues such a right is an important sign of a long-term, stable commitment to preschool. Indeed, there is a strong correlation between the presence of a legal right and overall index performance.

For instance, South Korea (ranked 10th) enacted its Early Childhood Education Act in 2004. Among other things, it stipulates that the government “offers one year free early child education immediately before entering an elementary school, and requires the central and local governments to bear the cost for the free-education”. By contrast, Singapore has no similar Act supporting the preschool sector.

Singapore ranks 21st in terms of affordability, pulled down by relatively low government preschool spending and insufficient subsidies for preschool providers.

Finally, Singapore ranks 30th in terms of quality, with low scores for, among other things, student-teacher ratios and preschool teacher wages.

While Singapore has some excellent preschools, they tend to be expensive. More affordable programmes, including those run by the National Trades Union Congress (NTUC) and the PAP Community Foundation (PCF), are of varying quality. As a result, children of richer parents typically receive a much better preschool education and are subsequently more prepared for primary school, with greater social awareness, confidence and group interaction skills.

“From neuro-scientific research, we understand the criticality of early brain development,” Sharon Kagan, a professor of early childhood and family policy at Teachers College, Columbia University in the US, explains in the report. “Early childhood education contributes to creating the kinds of workforces that are going to be needed in the twenty-first century.” Google founders Sergey Brin and Larry Page, among others, have attributed their achievements partly to their good preschool education.

So, what can be done to improve the preschool environment here?

First, the research suggests that Singapore must raise minimum teacher qualifications. Experts agree that a well-trained workforce is the most important determinant of quality. Singapore last revamped its preschool teacher requirements in 2008, stipulating that from 2009, new preschool teachers must have 5 ‘O’ Level credits and a two-year diploma in pre-school education (before that only 3 ‘O’ Level credits and a teaching certificate were required).

Though a good step, this progression is well behind other countries. In Finland, for instance, all preschool teachers have a three- or four-year bachelor’s degree in education. Greece, similarly, made the decision to turn kindergarten training into a graduate profession in the 1990s. Singapore must raise the bar aggressively while providing financial assistance to help current teachers retrain to meet the new requirements.

This adjustment has to be aligned with primary and secondary school requirements, and will have to be part of a broader push to raise the status and wages of all teachers in society. At the top end, preschool teachers in Denmark earn an average of nearly US$50,000 a year in purchasing power parity (PPP) terms-compared to less than US$19,000 in Singapore.

According to the Ministry of Manpower, preschool teachers are the lowest paid profession within the “Associate professionals and technicians” category, which includes, among others, social workers, display artists and dental nurses. The median gross monthly preschool teacher wage (S$1,840) was just 63% of Singapore’s overall median gross wage (S$2,925) in 2011.

Second, the research indicates a preschool teacher shortage in Singapore. The current student-teacher ratio here is 20 to 1, well above places such as Denmark (5.5), Canada (12) and Taiwan (12.6). Although there is some disagreement about what class size is optimal for better developmental outcomes, smaller classes are certainly more manageable for teachers.

While higher salaries should naturally attract more people to teaching, Singapore can also make strong efforts to attract qualified working professionals from other careers to transition into the profession, as the UK has done.

Third, there is a need to bolster parental awareness and involvement in early childhood education. The top performing countries have extensive parental education programmes to ensure that parents understand the importance and role of preschool, and can provide a supportive home environment, including adequate social, emotional and motor-skills training that is “age-appropriate”-matching the developmental level of children as they grow.

Other ways to improve quality include creating better links between preschool and primary school and putting robust data collection mechanisms in place to enable more accurate preschool programme quality assessments.

Finally, as these measures will result in higher costs, more public money will have to be spent. In terms of government spending per year on each relevant-aged child, exact figures for Singapore are not available, but it is understood to spend less than Norway does (US$7,620 in PPP terms), and less also than countries such as New Zealand (US$4,329), Japan (US$4,029) and Poland (US$2,635).

Singapore’s privatised preschool education sector is currently funded through subsidies given directly to families, who can then secure preschool places for their children-or a “demand-side” approach. In some countries, subsidies are given directly to providers, with specific mandates about the need to accept all children-or a “supply-side” strategy.

Singapore’s limited supply-side support is highly targeted. It is offered only to non-profit providers with no ethnic or religious affiliations who have the ability and reach to provide services to all children, including those from low- to middle-income families. Currently, only the NTUC and the PCF groups qualify for support, which is calibrated to help them keep their fees affordable.

While the Nordic countries have a nationalised, supply-side approach, the research shows that there are other countries, such as New Zealand (ranked 9th), that have achieved success with a private sector, market-led strategy, through subsidies both to providers and disadvantaged families.

A common assumption is that higher public spending on preschool will necessarily mean higher taxes and/or a diversion of public money from elsewhere. But a third way could be for preschool investment to come under deficit spending, with any possible tax hikes left for future generations, who are in any case the main beneficiaries. In other words, perhaps little children can pay for their own quality preschool when they grow up and start earning.

And yet they may not have to. According to the research, some studies suggest that preschool investment can yield annual returns ranging from 8% to 17%. These accrue partly to the children themselves—largely in the form of higher lifetime earnings—but more significantly to the wider community, in terms of reduced need for later remedial education and spending, as well as lower crime and less welfare reliance in later life, among other things.

In many countries, preschool investment often forms part of a broader package of family support to increase female participation in the workforce and maintain birth rates.

The research also indicates that greater preschool availability, affordability and quality can help reduce social inequality. This is not only because parents can work more, but also because quality preschool better prepares children for primary school, improving educational and professional outcomes later on in life, thereby enhancing their future earning potential.

There is currently much debate in Singapore about how best to address social inequalities. One possible way is by giving all children, regardless of background, their best shot at life.

(Full disclosure: I was the editor of the Starting Well report, which you can download here)