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.

Reforming Alberta's Heritage Fund: Lessons from Alaska and Norway

Reforming Alberta's Heritage Fund: Lessons from Alaska and Norway, by Jason Clemens and Robert P. Murphy.

"Alberta’s policymakers can learn much from the examples of Alaska and Norway. One obvious change in the Alberta fund would be the establishment of an explicit percentage of non-renew able resource revenues to be placed into the Heritage Fund, where they would be off-limits to cur rent spending. Another change would be the creation of realistic institutional safe guards to make these rules effective. If Alberta’s policymakers moved even modestly in this direction, future Albertans would be far richer because of the changes."

This is a very informative comparison of three citizen-ownership funds.

1. The Alaska Permanent Fund
2. Alberta's Heritage Fund
3. Norway’s Government Pension Fund Global

The first is growing and giving good dividends to citizens/residents.

The second is a complete failure. It is not growing and is not giving dividends to citizens/residents.

The third is growing and growing, but not (yet) giving dividends to citizens/residents.

The main lesson is that the fund must be well protected by the Constitution, by carefully enacting laws that protect the growth of the fund and at the same time ensure dividends to citizens/residents. Only the Alaska Permanent Fund has this protection.

Jason Clemens: B.C. Prosperity Fund Good Idea If Properly Designed

Jason Clemens: B.C. Prosperity Fund Good Idea If Properly Designed.


British Columbia is between Alaska on the west and Alberta on the right. All three have funds that are linked to royalties from natural resources. In the words of Jason Clemens,

Thankfully there are lessons to be learned, and avoided, from our neighbours. Specifically, Alberta provides stark lessons on what not to do when establishing such a fund while our other neighbour, Alaska, provides an equally plain positive lesson.

In short,

1. Contributions to the fund must be mandatory by law (Constitution, no less). Politicians given discretionary power will always find something else that is more urgent.
2. Withdrawal from the fund must be restricted by law to dividend payments, as in the Alaska Permanent Fund. Politicians given discretionary power to dip into the fund will soon empty it.

Speech from the Throne. Will British Columbians get annual citizen dividends?

An important event happens in British Columbia, Canada. They are using royalty revenues to set up a BC Prosperity Fund.

The crucial concern is whether the BC Prosperity Fund will be squandered away as in Alberta's Heritage Fund or it will be protected and distributed to residents as in Alaska's Permanent Fund.

The Prosperity Fund is expected to get $100 billion over the next 30 years. British Columbia has a population of about 4 million. If the Prosperity Fund's investment return is distributed to residents, the amount can be quite substantial. Assuming a return of 5%,  the amount could be about $1000 annually for each resident. This is close to what Alaskans have been receiving every year over the last 3 decades.

Extracts from "Speech from the Throne" are shown below.

Speech from the Throne | 5th Session | 39th Parliament | Legislative Assembly of British Columbia: (Feb 2013)

The second stream of revenue comes from new royalty revenues directly for the province – British Columbia's share of resource profits. This could exceed one hundred billion dollars over the next 30 years.

This resource belongs to the people of British Columbia, both here today and those to follow. It must be spent wisely – not just for the benefit of today's citizens but also for our children and grandchildren.

To protect this second stream of revenue for generations to come, your government is establishing the British Columbia Prosperity Fund.

Future royalties will be designated to this fund, ensuring British Columbia families can benefit from the prosperity created by natural gas in our province.

This will be a transformational change for our province and we cannot afford to be short-sighted.

Protecting the British Columbia Prosperity Fund

Your government will stand up for British Columbia for generations to come.

Earlier I spoke about the British Columbia Prosperity Fund. Your government is committed to ensuring the B.C. Prosperity Fund remains an endowment for future generations.

Your government is resolute that the Prosperity Fund cannot become a backstop or excuse for poor fiscal management of government.

The B.C. Prosperity Fund belongs to the people of this province, and it will be protected for them.

Some rich abhor inequality

There is this joke about Zhou Enlai and Khrushchev. Khrushchev proudly proclaimed his proletarian background in contrast to Zhou's non-proletarian background. Zhou supposedly told Khrushchev that they had something in common.

   "We are both traitors to our class."

In Singapore, Professor Lim Chong Yah, "one of Singapore's most distinguished economists", is calling for a raise of the low wages to $1000 a month. Further, he calls for a minimum wage law if the voluntary increases do not happen.

Tommy Koh, international lawyer, professor, & former ambassador of Singapore to the United Nations, supports Lim's proposals. Tommy Koh writes,

"In conclusion, I wish to thank Prof Lim for being our moral conscience. He has reminded us that our mission is to achieve growth with equity. Our ambition is to build a fair and prosperous Singapore. What we have achieved so far is a prosperous but unfair society.

Prof Lim has warned us that we have deviated from our original path and that we are dangerously close to a point when our inequality could adversely affect our cohesion and harmony."

While a minimum wage law will definitely help to raise the wages of the very poor, we should remember that another equitable law is for a citizen-ownership income. The Alaskans have done it, and they are enjoying yearly citizen dividends of $1000 to $2000. In Singapore, the possible citizen income is $9000 annually per citizen.

Suppose we manage to have a minimum wage of $1000, as proposed by Lim. A poor man may work at this minimum wage and support his family of 3 or 4 at $12,000 per year.

Suppose we manage to pass a law similar to the Alaska Permanent Fund, where every Singaporean gets his citizen income of $9,000 per year. The poor family of 3 or 4 surviving on $12,000 minimum annual wage will get a boost of another $27,000 or $36,000. This is real boost for a more equitable society. Each and every person gets an equal reward for his ownership of the country. This is also justice. According to the Pope, a person should get what he deserves for his being, not only for his acting. Just being citizen owners, citizens have a right to their citizen income from the common ownership of their country's wealth.

Kenneth Jeyaretnam of the Reform Party is proposing a citizen-ownership democracy. Are the other political parties in Singapore interested?

In Alberta, a province in Canada, the second biggest party, Wildrose Party, with 34% vote, is also proposing a citizen-ownership democracy. It is only a question of time before another state/country adopts a citizen-ownership democracy. The world will evolve toward this democracy model as more and more citizens are educated and demand their rightful citizen income.

Canada Albertans missed their chance for a citizen-ownership democracy

Alberta party plans to share wealth if elected

Alberta's Wildrose party is promising free oil money for all if it wins the election on April 23.(2012)

Leader Danielle Smith announced Monday a Wildrose government would pay directly to citizens 20 per cent of all future budget surpluses generated by oil and natural gas revenues.

"We all own the resources and we all deserve to have a share in that wealth," Smith said at a campaign stop."

However, the promised amount is not significant.

"Smith said if that happens, her team would cut a $300 cheque to every man, woman, and child."

The Widlrose Party won 34% of the votes in Alberta's election in 2012. It has 17 out of the 87 seats in the Legislative Assembly of Alberta.

What the Wildrose Party should really consider is the amount of wealth distribution. $300 per resident is way too small, compared to Alberta's common wealth. Alaska is distributing citizen-ownership incomes of $1000 to $2000 annually, even though only a small fraction of their oil revenue goes into their special citizen income fund. Even Singapore, traditionally regarded as not a natural resource rich country, has enough common wealth to distribute $9,000 annually to every citizen.

The Wildrose Party needs to be more forceful. Don't think of sharing just the leftovers, i.e., the budget surplus. Think of sharing the common wealth revenues.

If the Wildrose Party can come up with more realistic numbers, there is hope for Alberta to become a citizen-ownership democracy where citizens/residents share equally in the state's common wealth.

Citizen-ownership Democracy. Partial Examples. Canada. Mongolia. Russia

A) Canada, Alberta.

"In late 2005, Alberta Premier Ralph Klein announced that one-third of the Canadian province's unbudgeted surplus from high oil revenue would be distributed to Albertans, each of whom would receive a CanS400 check in 2006." (From Oil, profits, and peace: does business have a role in peacemaking? By Jill Shankleman)

This is not as good as a full citizen-ownership democracy where the full oil revenue will be distributed directly and equally to all citizens.


B) Mongolia. Where citizens own the land of their country.

"Between May 2003 and May 2005, each Mongolian is officially afforded the opportunity to take up a private, household landholding within their respective “home” areas. The amount of land varies according to the latest land law, with the smallest parcels being granted in large urban areas, and larger parcels being granted in aimag and soum areas."

"Land privatization in urban areas (approximately 0.02% of total land – but figures vary) is free of payment. Only application fees are paid, and we encountered fee payments that were significantly different than government published rates for different elements of the application. After May 2005, acquisition of land will require payment. Title is only granted to households/families at present. Families in Ulaanbaatar are entitled to 0.07 ha, while in families in rural aimag centers and soum centers are granted up to 0.35 and 0.5 ha, respectively."

http://pdf.usaid.gov/pdf_docs/PNADE605.pdf


C) Russia. Distributing free land to 3-child families.

Russian President Dmitry Medvedev has a really really fantastic plan. He gives 3-child families free land. "Caring for the future generation is the most reliable, intelligent and noble investment," Medvedev said. There is something there for Singaporeans to learn.

If Singapore adopts a citizen-ownership democracy, every citizen stands to receive thousands of dollar a year from the sharing of common wealth (see the Singapore example). This is a sure way to really grow the Singapore future generation.

http://en.rian.ru/russia/20110616/164646607.html
Russian President Dmitry Medvedev has signed an amendment to the national Land Code to provide free land parcels to families with three or more children, the Kremlin said on Thursday.

"In line with the amendments to the Land Code, citizens with three or more children will be granted free parcels of land held in state and municipal property, including for the purpose of individual housing construction," the amendment said.

The measure is part of a wider government policy to provide broader support to families and reverse a severe population decline.

During his annual address to the nation in November, Medvedev outlined a range of proposals aimed at supporting families with many children.

"Caring for the future generation is the most reliable, intelligent and noble investment," Medvedev said.