* My article in BusinessWorld last October 24, 2019.
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“The man of system…
is apt to be very wise in his own conceit; and is often so enamoured with the
supposed beauty of his own ideal plan of government, that he cannot suffer the
smallest deviation from any part of it.”
— Adam Smith,
Theory of Moral Sentiments (1759), Part VI, Section II,
Chap. II.
SINGAPORE — I came here to be one of the speakers in a
forum on “Intellectual Property Rights and Economic Growth” organized by the
Adam Smith Center, a new independent think tank headed by a young and dynamic
leader Bryan Cheang. The event was held at the Singapore Management University
(SMU) School of Law.
In my presentation on “Importance of Brands and
Government Policy,” I used that quote from Adam Smith, the father of market
economics, to highlight the fact that too much central planning and over-reaching
regulations and prohibitions by governments are wrong, that they invite the law
of unintended consequences.
The other speakers in the forum were Lorenzo Montanari of
the Property Rights Alliance (PRA), Dr. Sary Levy-Carciente, author of the
International Property Rights Index (IPRI) 2019, and Dr. Linda Low of the
Singapore University of Social Sciences (SUSS) School of Business. Dr. Chandran
Kukathas, Dean of the School of Social Sciences of SMU gave the welcome
message.
Among the things that Dr. Low discussed in her
presentation was their ageing population and the rise of migrant workers from
neighbor Asia engaged in “3D” work — dirty, dangerous, demeaning — that the
locals are not inclined to take.
Having an ageing population when the economy is already
prosperous and developed would invite cultural and fiscal problems someday. Who
will take care of the many old and retired people when their children and
grandchildren are busy in work or school, like changing adult diapers — robots
or migrant health workers?
I checked data for age dependency of young people — the
higher the number, the better for a future “army” of workers and entrepreneurs
and hence, for economic growth — and here is what I got. (See Table 1.)
True enough, in our hotel here, while the concierge staff
are young Singaporeans and some Filipinos, many in the restaurant are locals
looking to be in their 40s to 60s. The room cleaners are young migrants perhaps
from Indonesia, India, and Bangladesh.
Past policies of high government intervention in family
planning can backfire today or tomorrow. And this reminds me again of
state-sponsored and taxpayers-funded population control measures under the
controversial RH Law of the Philippines. If it was a good idea, it would not
require legislation and rely on civil society voluntary funding (like Gawad
Kalinga, Rotary Homes, Books for the Barrios, etc.) but because it was a bad
idea, it needed legislation to coerce more taxpayers funding.
One noticeable thing in highly developed economies like
Singapore is the seeming absence of many informal enterprises that compete with
the formal sector. Thus, the sidewalks are really wide and clean, with no
ambulant vendors that spring up from anywhere and often impede the paths of
pedestrians or cars.
One interesting bit of data I came across while I was
scrolling the World Bank database is competition by unregistered firms (see
Table 2). Hong Kong, Japan, South Korea, and Singapore have no data, so either
they cannot get reliable data, or all firms there are registered.
And this further shows one result of too much business
regulation by governments, especially by socialist ones like China, Vietnam,
and Laos. India’s constitution also declares itself as socialist.
The Philippines’ three new laws — Ease of Doing Business
(EODB), Anti-Red Tape, and One Person Corporation — would encourage more
Philippine entrepreneurs to go formal while restricting the grubby hands of
corrupt bureaucrats from prolonging the agony of business registration and
renewal of permits to solicit extortion and bribes. Kudos to the Department of
Trade and Industry and Secretary Ramon Lopez for leading these reforms.
We need more economic reforms like even lower personal
and corporate income taxes. The ASEAN Economic Community has unleashed tax
competition among member countries to attract more investors from the region
and rest of the world.
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