Jun 10, 2013

Let’s run Singapore like SGP Pte Ltd. An analysis.

Let’s run Singapore like SGP Pte Ltd (Todayonline, or Tremeritus) by CHARLES TAN MEAH YANG 08 JUNE

The above is an article that proposes the running of Singapore like a company.

Here are a few main points.
  • "Unlike a corporation, every citizen is limited to one share and one vote, neither of which can be sold or traded because unlike normal commodities, they are inalienable."
  • Distribute annual dividend. "The amount distributed would depend on certain factors such as our primary surplus the previous year and the returns generated from our sovereign wealth funds, in much the same way that corporate dividends are constrained by profitability."
On first look, this proposal looks similar to the idea of a citizen-ownership democracy. Under both systems, citizens get annual dividends. However, the foundation for the dividend is very different. The results can and likely would be very different.

The citizen-ownership democracy rests on the universally accepted understanding that citizens are owners of their country. This is proclaimed by every leader. The country's common wealth belongs to its citizen. In a citizen ownership democracy, revenues derived from the common wealth get distributed directly to their citizen owners equally.

The SGP Pte Ltd proposal defines dividend as profit from the country's budget, i.e. the budget surplus. 

A country can have a huge common wealth revenue and yet can be short of budget. The relationship between common wealth revenue and budget surplus depends on many other events. For example, a government not keen on declaring a budget surplus can declare a contingency fund, similar to companies preparing for bad loans, or they can simply spend away the potential surplus. 

Revenues from clearly defined sources are not easy to manipulate. Profit is easily manipulated.

There are good examples in the world. The Alaska Permanent Fund is a clear dividend system based on revenue from Alaska's common wealth. It is doing well, with every resident in Alaska enjoying their yearly dividend. The Alberta Heritage Fund is the bad example. Politicians are allowed to use the fund for operating purposes. This is similar to the profit sharing dividend. With no profit (surplus), there is no dividend. The Heritage Fund is basically dead, and Albertans are not getting any dividend.

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