One of the things I wanted to do for this email was to amalgamate some of the views I have as well as others that I have discussed with. In a way, a snippet of things that happened this year, and what it means for the year ahead. That is, the outlook for 2012.

2011, the watershed year

2011 has definitely been a watershed year in more ways than one. We have the General Elections, we have Orchard Road floodings, we have MRTs breaking down dramatically, we have numerous dead bodies found in reservoirs, we have a new record price for properties, we have our 2 Integrated Resorts, numerous new shopping malls and numerous new office buildings in the CBD. We also have Lee Kuan Yew leaving active politics. In a way, 2011 is really extraordinary. How can so many things happen in the same year? Suay? Heng? Or is the world really ending in 2012?

Complacency is a downfall of the Singapore model?

Some of the viewpoints I have been hearing about is if the Singapore model is good to go for the next decade? In the last 10 years, the biggest issue in Singapore was.. no issue. We have taken a lot of things for granted. Things were meant to work. Jobs will be available as long as you studied to the best of your ability. We will always have housing, we will always have cheap transport, we will have accessibility to anything you want to buy. This has also affected the policy makers. Why fix things if there is nothing broken? Thus, I would say the last 5 years has been one of complacency. There has been some lack of foresight and planning. After all, you pay senior management primarily for their foresight..

An example is the building of public housing and public transport. The North South Expressway was mooted to expand the transportation infrastructure from the Northern regions of Singapore into the central regions. This was announced in 2008, but it will only be completed by 2020. I’m sure there was already 1-2 years of planning before 2008, so it takes about 14 years for something like that to bear fruit. Same for public housing and many policy based problems. Senior management are paid to foresee a problem 5- 10 years, even 15 years, down the road. Complacency has set in such that a lot of stop gap measures were taken rather than true foresight planning. I am quite optimistic at the current batch of PAP MPs though. However, it will take 10 years before we can see the effect.

Policy makers and senior management are not the only group that was affected. The younger generation today have a lower threshold for tenacity. If something was too hard to do, then just quit and try something else. After all, we’re not going to starve to death. A lot of people were also seeking the get rich quick dream. Wanting to retire by 40 years old is probably quite a common phrase. Then the trick question, if everybody retires at 40, who’s still working if nobody wants kids and nobody wants foreign workers? Consumerism has become a problem for the masses. People seem to have a higher tendency to spend rather than save. A person can be earning $3k a month, but he owns a car, and eats good meals every other day. After 3 years of working, he might not have much savings. iPhone is another amazing phenomena. Most teenagers I see are very willing to spend $1k on a hp, and $300 on a Korean girl band concert ticket. Hmm.

Another group that has been conditioned by complacency is the MNCs. A lot of Government Linked Corporations (GLCs) like DBS, Singtel, Comfortdelgro, KepCorp, Capitaland, SGX has been seeking regional/international growth at the expense of not investing in Singapore. Most GLCs had the policy that they intend to reduce their dependency on Singapore by acquiring foreign companies. The good thing was that if Singapore declines, these GLCs are able to bring revenues from abroad to support the local businesses. Case in point is Comfortdelgro. Their Singapore bus and train services operates at less than 10% profit margin, but because they are the world’s second largest public transport provider, they are able to keep providing the service in Singapore (for political reasons too of course). The bad thing is that some companies have focussed so much on being overseas, that they do not spend enough money to upgrade the existing infrastructure in Singapore. An example would probably be Singtel, since they are so focussed on expanding in Australia and India now.

Growth at all cost? Or at the cost of intangibles?

The main charactistic of Singapore is that we are an open nation. A place that welcomes foreign MNCs to come and set up HQ. A place that is attractive that foreign investors want to invest. A place that is safe, friendly, and progressive. Unfortunately, that makes Singapore a externally dependent economy and thus vulnerable to shocks. At this point, Singapore is still a very attractive place. People still want to come to Singapore to work, set up businesses and invest. However, the potential to slow down is increasing, since people can go set up shop in one of the emerging nations. Singapore had the ‘grow at all cost’ model. This is a good model for a developing nation, since it is very easy to grow. However, I feel that it is likely to slow down in the next decade.

There was a big disruption with the MRTs the last few weeks. and that made me think of something: Productivity in Singapore hasn’t really gone up over the last decade, and it was more of a function of efficiency, rather than innovation. In the earlier years, MRTs typically take 3-4 minutes to get from 1 station to another. However, they have been increasing speeds gradually, such that at 1 point, it takes around 2.5 minutes per station. Everybody was very happy at the faster travelling time. When they had to slow down the train recently, I realised the problem with pushing the limits like this was the need for higher maintenance cost and the additional vibration noise that we had to endure. That too, we have gone complacent and have taken for granted that it takes 30 minutes to get from raffles place to boon lay. When it becomes 40 minutes as with last time, we complain. One of the theories of economics is that for a stable economy to increase it’s GDP, there has to be technological advancement. We haven’t really seen technological advancement on a global level for quite a while, and probably not so in Singapore, since we are on par with the world and are already at the technological barrier.

The truth is, we have a high GDP per capita, but a low GDP per capita work hour.

My view is that in the next decade, more likely than not, we would see Singapore slowing down. More maintainence work, more capital expenditure, less efficiency, more work-life balance. All these will affect our GDP, and the attractiveness of Singapore. Optimistically, we need to see our productivity in terms of GDP per capita work hour go up, before our GDP can resume it’s upward trajectory.

Developing nations hot at our tails

At this point, Singapore is still pretty high on the value chain. Keppel Corp and Semb Marine are the world’s 2 largest rig builders. Globally, Korea and Singapore makes up a large portion of the drillships and jack up rig building markets. However, China is gaining expertise fast, and probably in the next decade, we might see Korea and Singapore losing market share if they are unable to move up technologically. The problem with being at the forefront of the technological barrier, is that it is easier for someone to catch up to you. Wage differential will also be a point of issue in the next few years. A China/Indian nationality masters level student is very willing to work in Singapore for the same pay as a Singapore nationality bachelor degree holder. Like what I mentioned about tenacity earlier, I have been visiting some HNW clients recently, and a lot of them are saying that the younger generation including their own kids nowadays just don’t have the ability to stay long in a job. Most of the time, they take the low unemployment rate for granted. If they don’t like a job after 3-6 months, they can quit and find a new job. If this mindset doesn’t change in the next few years, then we would probably see the foreigners succeeding in moving to middle management.

One of the most common advice I hear, and also give, is that Singaporeans should consider working overseas. Singaporean talent is still much sought after, and MNCs overseas do pay a premium for middle managers. I have friends working in India, Shanghai, Jarkarta, Hong Kong, USA, Australia, Netherlands, etc. Most of them are decently happy, but you do lose out on family ties and the ability to settle down in Singapore.

Value of work is less than the value of asset appreciation?

Since 5 years ago, I have been saying that investments is something that all of us must do. One of the main reason is that when we grow old, we don’t want to be working because we need to. We need our money to work for us, to provide us a cashflow so that we can work for leisure, rather than being forced to work. Investments, house rentals, business incomes are just some of the ways. As we move forward, I am seeing that investment income is becoming more and more dominant. For example, I have a 30 year old friend who bought and sold a house and made $500k profit. How many years must you work in order to save $500k? Also, I know a person who owns a investment property at marina bay sail. The rental income is $4k a month. And as mentioned quite a few months back, starhub at it’s low was $1.80 therabouts. At that time, the dividend yield was around 14%. Without including the capital gains you can get, that means if you invested $200k you would have gotten $30k of annual income every year tax free.

The value of work has truely dropped such that asset appreciation is really creating a more viable source of income. But don’t get me wrong, it’s not a Singapore only problem. It is a global issue, and there will probably be no solution. The rich people will tend to get richer. And there’s no reason why they will change the system otherwise. Thus, people with extra savings must look for ways to put their money to work. Personally, I am on a lookout for property opportunities, business ideas, and stocks investment ideas. Our jobs are just a source of income, and not a source of wealth.

Consider foreign unit trusts

In Singapore, most people either invests directly into Singapore stocks, or indirectly through Singapore unit trusts. The Prudential Singapore Managed Fund, Schroders Singapore Trust are the some of the 2 biggests fund by Assets in Singapore. This strategy has worked well in the last 30 years as Singapore was in a strong growth phase. Thus, there wasn’t really much reason for us to look overseas. However, I believe some of the emerging markets are coming up strong, and we would probably see an outperformance from them soon. Some of the countries I would consider is Thailand, Vietnam, Indonesia, China, and Emerging markets like Turkey and Brazil.

For those that still prefer local equities, consider companies expanding out of Singapore into the regional markets. We should avoid companies that are forced to look back into Singapore, such as the GLCs that are politically pressured to increase their capital expenditure here.

Uncertainty in the year ahead

I believe that globally, the year ahead would be quite an uncertain one. In a sense, it is probably a test of the systems in place for the last decades. UK used to be a superpower and they lost it. The global landscape had changed a lot since the 1900s when they were the superpower. The current superpower is the USA, and more likely than not, we would see that change in our lifetimes.

2012 would be an interesting year. My view is we would see an immediate bottoming around March-June 2012, and as per my previous emails, I am accumulating my warchest to unleash onto the markets.

A quick glance, I would generally see property prices falling, COEs with a high potential of rising if the taxi companies choose to do fleet renewal next year, and stock markets generally suffering on low volume. I do hope taxi companies don’t do fleet renewal and that COE would drop, but looking at the timeline, fleet renewal is more likely to happen in 2012. I do think 2012-2013 are good times to look to starting a business though.

Have a good 2012 ahead!

Related posts:

1. Banker, empire builder: The story of Mr Mochtar Riady
2. Greece’s doomed generation and the good fortunes of Singaporeans

http://business.asiaone.com/Business/News/Story/A1Story20111225-318131.html

Sunday, Dec 25, 2011
The Business Times

Last month, if Singapore had been a person, it would have stood above the unwashed tableau of Occupy Wall Street (OWS), watching from its penthouse and laughing into its cognac.

But it has spent the year being a little down in the mouth, preoccupied with property prices, taxi fares and faulty trains.

This gloom is hard to explain in the grander scheme of things.

When OWS’s gross simplification of the one per cent trampling on the 99 per cent is contemplated, Singapore is practically part of the world’s one per cent.

This is a country where, every single day, 25 people bought either a Mercedes-Benz or a BMW for the first 11 months of the year.

In the same period, every four days, someone drove away from the Ferrari showroom with a big smile on his face. (One assumes that, each time, it’s a different person.)

When it comes down to it, Singapore can be almost as Wall Street as Wall Street.

Last year, 8.5 per cent of New York City’s workforce was on the payroll of the finance and insurance industries.

Singapore had about 6.4 per cent of its resident population on it, while Hong Kong had 6 per cent.

If a demonstrator with anti-banking invective to expend were to imagine the two as corporate entities – which is not hard – he would therefore be more inclined to picket Singapore than Hong Kong.

“One per cent” might be a dirty term these days, but would-be picketers here have to be careful about calling others names that might apply to themselves.

On a per-adult basis, Singapore has the sixth highest net wealth in the world: a mean value of US$284,692, according to the Credit Suisse Global Wealth Databook 2011.

“Net wealth” here is defined by a person’s financial and real estate assets minus debt.

The mean value, however, gets short shrift from experts, since it ignores wealth distribution.

“(It is the) mean without information on inequality. A very high personal net wealth with high inequality is likely to imply a skewed prosperity within the country . . . Actually, it is not something we would like to boast about,” says Ho Weng Kong, senior lecturer at SIM University.

The median net wealth figure then – which is less vulnerable to being yanked up or down by the obscenely rich or the devastatingly poor – sees Singapore ranked eighth out of 160 countries, at US$101,033.

On this score, the only countries that outrank it are Australia, Japan, Belgium, Iceland, Italy, Luxembourg and the United Kingdom.

Last year, the odds of being born in any one of these countries, including Singapore, was 2 per cent – not quite the fabled one per cent, but close enough.

This is better than the best odds in the Singapore Toto (one in 321), but to properly appreciate the jackpot-like nature of being born in any of these eight countries, the rest of the world needs to be surveyed.

At the best end of the ovarian lottery, more than half the adults in Singapore belong to the wealthiest 8.8 per cent of adults globally.

And while the one per cent of the United States might be under the onslaught of scrutiny there, the global one per cent club is thriving in Singapore; two out of every 25 adults here can claim membership.

On the losing end of the ovarian lottery, however, only 0.3 per cent of the adults here have less than US$1,000 in net assets.

Perhaps it is not so much that Singapore is fabulously wealthy (which it is), but that the rest of the world is poor (very much so).

Suppose you represent Singapore’s population with 100 people riding on a bus.

If that bus were to stop at the world’s poorest neighbourhood to let residents get off, less than one person would alight.

This shantytown, however, is where more than one-fifth of the world’s adults have to live.

This says as much about the rest of the world as it does Singapore.

To be better off than half the adults on this planet, the threshold is heartbreakingly low. All it takes is US$4,200 in net assets.

‘Only moderate inequality’

This perhaps goes some way towards clarifying why Occupy Wall Street took off but Occupy Raffles Place bombed in a way that would embarrass nitroglycerine.

Tropical humidity and legal concerns aside, the conditions for dissatisfaction are different.

In the United States, 10 per cent of the adults control 73 per cent of the wealth.

Here, the privileged group controls just 57 per cent, which translates to “only moderate inequality” in Credit Suisse’s book.

Many, however, will take issue with “only” and “moderate”.

Academics like SIM University’s Dr Ho are quick to point out that “among the developed countries, we are at the very top” of the inequality stakes.

Based on numbers from the Central Intelligence Agency, Singapore is ranked 28th out of more than 100 countries on the Gini Index.

The higher the ranking, the greater the inequality.

Citigroup economist Kit Wei Zheng makes a sobering point about the lowest-earning 20 per cent here. For this group, in the first half of the noughties, “the rising Gini coefficient was partly due to declines in the absolute levels of wages”, he says.

“While the period of fast growth in 2004-2007 did see wages for the bottom 20 per cent recover most of their earlier losses, wages of the rich rose much faster.”

This means that the bottom 20 per cent of working folk have spent much of the last decade standing still – an unpalatable notion when the rest of Asia appears to be pelting ahead.

Stuck in the middle with you

Mr Kit might have considered the plight of the working class and the prosperity of those flying First Class, but it is the condition of the middle class – this increasingly vocal and dissatisfied group – that is the most perplexing.

It is not clear what OWS’s demographics are like, but in Singapore, the events of this year have been given over to middle-class angst, not proletarian anger.

“A concrete example of this discontent can be seen in the recent general election in which the PAP garnered its lowest percentage of votes . . . since Independence,” says Kamaludeen Mohamed Nasir, an assistant professor of sociology at the Nanyang Technological University (NTU).

“The main issues . . . are a combination of the rising cost of living in Singapore and the lower standard of living . . . linked to the large increase of migration into the country over the last few years.”

Even if the issues are articulated, clarity does not necessarily follow in this relatively new examination of middle-class ennui.

“To better understand the extent of these anxieties, more rigorous research is needed,” says Prof Kamaludeen.

Tan Ern Ser, associate professor of sociology at the National University of Singapore (NUS), readily lists the lamentations of the middle class: a higher probability of downward mobility while being caught between the duties of filial piety and the obligations of parenthood.

Does the whinging bear listening to? This is harder to answer.

“Whether the issues are valid depends on the standards they compare their lifestyles with. If they were to compare with their parents’ generation, they would be very satisfied. But obviously, they don’t. They expect to live the Singapore Dream, equivalent of the American Dream,” says Prof Tan.

But the American Dream is in tatters now.

Maybe looking West no longer riles the middle class as much as looking upward does.

Says Mizuho economist Vishnu Varathan: “Being disgruntled is always a relative thing. More often than not, it is the middle class who tend to be more disgruntled. They tend to be slightly more educated and upwardly mobile, so they are frustrated when they see the guy earning the $1 million salary.

“They might not be badly off. They might be getting their $80,000 or $100,000 a year, but they’re disgruntled because they think, ‘Hey, I know almost as much as that guy does. Why is he getting the $1 million salary?’”

Incidentally, to have come within even wine-sniffing distance of the $1 million salary last year, you would have needed to be part of the proverbial top one per cent of tax-paying residents, according to data from the Inland Revenue Authority of Singapore.

To be disgruntled about getting $80,000-100,000 a year, you would have to be unhappy about being in the top 28.37 per cent.

This excludes residents earning $20,000 or less and are therefore not taxed.

Why so glum, chum?

There is, however, the niggling worry about mobility.

Where this is concerned, experts struggle to be definitive on the matter, but it is clear which way they are leaning.

“Given my own research using limited Singapore data and an assessment of the political economy in Singapore, (my assessment) is that mobility is relatively low compared to other developed economies,” says Irene Ng, assistant professor of social work at NUS.

Chia Wai Mun, assistant professor of economics at NTU, says that in Singapore, “there is a significant jump in the income and educational status of later generations relative to the earlier ones”.

“However . . . intergenerational mobility . . . is low. Those whose parents were at the bottom tend to remain at the bottom and those whose parents were at the top tend to stay at the top.”

It does not help either that even the asset-rich might not feel rich.

In the last quarter, residential property assets made up 50.2 per cent of total household assets here.

Says Citi’s Mr Kit: “Having a large chunk of wealth plastered into your home may not necessarily be a good gauge of economic well-being, especially when there are limited avenues to monetise housing net wealth in Singapore.”

Ultimately, the math of the middle class is a messy one.

But even the less mathematically rigorous endeavour of counting your blessings is hard when you do not have much time for it.

Last year, the average person in Singapore worked the most hours among developed countries, clocking 2,409 hours annually.

Norwegians worked just about half as hard: 1,414 hours.

Gallingly, Singaporeans were among the least productive, with the fourth-lowest gross domestic product per hour worked in purchasing power parity terms – while their restful Norwegian counterparts ranked first.

Whether cubicle drones here have themselves and Facebook-surfing to blame is as muddled as the larger issues that plague the middle class.

OWS is, on tangible terms, a shadow of itself.

Last month, police evicted protesters from Zuccotti Park, the movement’s flagship site.

Thousands of protesters-turned-homeless people melted into the night with no place to go.

Singapore, with its 87.2 per cent home ownership rate among residents, will not find answers in OWS.

That does not mean, however, that the questions will go away.
This article was first published in The Business Times.

Related posts:

1. Winning performance by Hanna @ Miss Pole Dance Singapore 2011
2. Congratulation to Dr Tony Tan for being elected Singapore’s 7th President
3. Benefits and problems of the Singapore GRC Parliamentary system
4. Suzie Q and Toby J @ SG Pole Challenge 2011

Originally appeared in The Business Times, 8October 2011

Indonesian tycoon Mochtar Riady looks back on a lifetime filled with adventure and accomplishment. By Vikram Khanna

IN his prepared remarks for a talk at NUS Business School (of which he is a major benefactor), Indonesian tycoon Mochtar Riady, quoted the Chinese philosopher Lao Tzu to sum up his management philosophy: ‘Trees that fill our embrace emerge from small sprouts, and a thousand mile journey always starts with the first step … Plan for the difficult while things are easy, and act on the great while it is still small.’

Mr Riady started small and went on to build a pan-Asian business empire with some US$11 billion worth of assets, spanning financial services, property, retail, information technology, natural resources and healthcare.

But he is first and foremost, by instinct and by passion, a banker. ‘I went into other areas only by chance,’ he says.

Banking was an ambition he harboured since he was a schoolboy. Speaking in Mandarin through an interpreter – though later he breaks into English – he recounts this childhood memory:

‘When I was in primary school in Indonesia, I had to pass a big building on my way from home to school. I always thought, oh, this building is so impressive and the people who work there look so elegant. But I don’t know that they do.’

‘So I asked my teacher about the building. He said it is a bank. I asked, what is a bank? He said, a bank lends people money and makes money from that. And I thought, maybe one day I can become a banker.’

‘So, when I graduated from school, I was already thinking about being a banker. My father said, you are unrealistic. The banking business is a rich man’s business, how can you do it? My answer was, the bank’s commodity is not money, it is trust. As long as I can have people’s trust, I can be a banker. My father said, you don’t have the trust either. I told my father: I can find some wealthy people who command trust to be my partners.’

‘So I spent three years to persuade some prominent business leaders in Jakarta to be my partners. Finally, my dream came true.’

In 1959, armed with just his dream and no banking experience, Mr Riady ventured forth. He and his partners managed to gain control of a small local bank. That was the beginning of a half-century-long business career that spanned multiple industries and continents and made him a household name in Indonesia.

Born in Malang, in East Java to a middle class Chinese family in 1929, Mr Riady’s life has been tumultuous, adventurous, opportunistic and rich in accomplishment. He has his life-story neatly mapped out in his mind.

‘My life has had four phases,’ he says, as we sit across each other in the Presidential Suite of the Mandarin Orchard Hotel – which is owned by Riady’s Lippo group, through its controlling interest in Overseas Union Enterprises (OUE), the group’s Singapore flagship.

‘Each phase spanned 20 years. The first was from 1930 to 1950. It was the time of the global economic depression; you know, I was born in the year of the great depression, but I was fortunate that I did not suffer as a result of that.’

He did not, however, have an easy childhood.

‘My grandfather in China was ill, so our father took us back to our home town,’ he recounts. ‘After my grandad passed away, we stayed back in China for a while. It was the warlord period and there was a lot of suffering.’

In 1935, Mr Riady’s father took the family back to Indonesia, which was then a Dutch colony. Four years later, the second world war began and the Japanese invaded the country. Little Mochtar spent most of his primary school years in the shadow of the war and the Japanese occupation.

After the second world war ended began Indonesia’s war of Independence against the Dutch. ‘I was expelled from Indonesia by the Dutch because I was involved in organising a movement against colonisation,’ he recalls. ‘So I went back to China.’

There, he enrolled in university in Nanjing. But China in the late 1940s was in the throes of political upheaval – a civil war was raging between the nationalists and the communists. His university years too, were traumatic. Soon after, Mr Riady returned again to the land of his birth.

‘Those first 20 years were very difficult,’ he reflects. ‘But because of that hardship, I became more resilient and learned how to overcome difficulties.’

In the second phase of Mr Riady’s life, spanning the years 1950-70, Indonesia became decolonised and had its own government, led by Sukarno. ‘This was the period of the emergence of the national economy in Indonesia, and I started to see opportunities to start my business,’ says Mr Riady. It was during this phase that he embarked on his banking career. His first significant venture was Bank Buana, where he took charge in 1966. (Bank Buana was taken over by Singapore’s UOB in 2004).

In the early 1970s, the Indonesian government wanted to consolidate the country’s fragmented banking sector and encouraged small banks to merge. Mr Riady and some of his partners – including his brother in law – raised capital and amalgamated several small banks to form Bank Panin in 1971. Within three years, its assets rose 20-fold, and it became one of Indonesia’s biggest private financial institutions. But Mr Riady’s biggest break came in 1975, when he partnered Indonesia’s then-richest tycoon Liem Sioe Liong aka Sudono Salim – the founder of the Salim group – and took charge of Bank Central Asia (BCA). ‘BCA started with only one office, 27 employees and total assets of not more than US$3 million equivalent,’ he recalls. ‘When I separated from Mr Liem, BCA was the largest private bank in Indonesia and the third largest commercial bank.’ BCA’s assets grew almost 390-fold over the fifteen years he was in charge, making Mr Riady a household name in Indonesia.

Then of course there was Lippo Bank, once owned by the Riady family, which was recapitalised after the Asian financial crisis of 1997. Mr Riady subsequently managed to regain control of the bank, which in 2005 was sold and later merged with CIMB Niaga Bank, controlled by Malaysia’s CIMB group.

Mr Riady looks back at his achievements as a banker with some pride. ‘Now BCA is the largest bank in Indonesia. Panin bank is number 6. Lippo Bank (now part of CIMB Niaga) is number 4. Bank Buana is number 9. Four major banks in Indonesia are my babies.’

During 1970-1990 – which Mr Riady considers the third phase of his career – the Lippo group started to spread beyond Indonesia. ‘I began to look at how I could turn Lippo into a globalised business,’ he says. He did something radical for an Indonesian businessman – even by today’s standards: ‘I hired 86 Americans into our group to introduce modern management methods. This was the globalisation of human resources.’

Business globalisation followed: Lippo ventured into Singapore, Hong Kong, the Philippines, Australia and the United States, and diversified into real estate, hotels, retail and healthcare, among other businesses.

In the US, the group serendipitiously ended up doing business in the state of Arkansas in the 1980s – when Bill Clinton was governor. The Riadys became friends with the young Mr Clinton, and later contributed to his successful presidential campaign in 1992. However, this contribution – because it came from a foreigner – caused a scandal in America, and the relationship cooled. When asked if he is still in touch with Mr Clinton, Mr Riady says, with a smile: ‘I think he is very busy. I also have to concentrate on my business.’

Investing in China

The highlight of the fourth phase of Mr Riady’s career, which spanned the years from 1990-2010, was, he says, the shift in the centre of gravity of the global economy from the West to the East, and particularly to China. He was early to see China’s rise. In an interview with Asiaweek magazine in 1995 – when China was going through a difficult time – he said: ‘China at the moment is terrible, but in another 10 years it will be incredible.’ His group initially invested in infrastructure, property and manufacturing in China. But now, he sees new opportunities.

‘In China and India alone, we anticipate a total population of about 500 million middle class people,’ he says. Two opportunities in particular interest him: the rising demand for services such as retail, healthcare, financial services and education; and for more natural resources and commodities. The Lippo group is now concentrating on these areas.

‘The businesses I got involved with were always linked with the transformation of the world,’ he says.

But Indonesia is still his main base. How does he see the transformation of Indonesia since the fall of Suharto in 1998?

‘During Suharto’s time, the economy was booming, but the politics was quite autocratic. After Suharto, the politics became more liberal and democratic, but the economy did not perform as well,’ he says. ‘But after more than 10 years of transformation, there are more equal opportunities for doing business in Indonesia now, and very good opportunities.

‘I have very high confidence in Indonesia’s future. It has the advantage of geographical location, abundant natural resources, a population of 240 million, a high proportion of which are young people.’

He does not believe that Indonesia’s freewheeling democracy will lead to instability and chaos. ‘Indonesians are basically moderate in nature,’ he says. ‘Social harmony will be maintained.’

An affable and avuncular figure, Mr Riady describes his own business style as more democratic than autocratic. He is very patient. ‘No business runs smoothly from the beginning,’ he says. ‘It takes some development and learning.’ He also puts a lot of emphasis on team building. ‘For me, the most important thing in a business is not the capital. It is building the right kind of team, especially a management that can work to overcome difficulties.’

Timing is everything

As a businessman, he has a reputation for a keen sense of timing – which has paid off repeatedly. ‘When I moved into Singapore five years ago, property prices were much lower than now. After I bought, less three years later, I sold at a higher price,’ he says. (Lippo’s OUE group had bought the freehold residential site at 21 Angullia Park for $228.1 million in December 2006 and sold it for $283 million in October 2009).

In the go-go years during the run up to the Asia crisis, the Lippo group took full advantage of the stock market boom. Between 1994-97 – the period when the boom was at its height – it raised some US$2.3 billion equivalent on the Jakarta stock exchange. Its heavy reliance on equity, rather than debt financing enabled the group to weather the Asian crisis better than other, more leveraged Asian conglomerates.

‘I always took certain steps before others,’ Mr Riady explains. ‘When the 1997 crisis started, a lot of people thought this would be a small crisis. But I thought it would be very very serious, with a significant impact.

‘I also think the current global financial crisis is very serious and will get worse. So during this period, it is better to play safe.’

He adds that if there is any business he can sell off ‘at a reasonable price’ he will do so. ‘And maybe one or two years later, I will buy them back at a cheaper price.’

‘Everything moves in cycles, up and down,’ he says, making a wave-like gesture with his hand. He is not sentimental about any of his businesses. ‘To me, everything is a commodity, you can buy or sell.’

Like many Asian tycoons, Mr Riady is a great believer in establishing connections and networks. In the United States, he befriended Bill Clinton and other luminaries of the Democratic party; in Hong Kong, he built close relationships with the Cheung Kong group led by Li Ka-Shing, and in China with the China Resources group. He has also generated much goodwill through generous acts of philanthropy; in Singapore, he has donated $21 million to NUS Business School and $5 million to the Singapore Management University. His family runs several charitable institutions in Indonesia, focusing mainly on the areas of health and education.

Like his two sons, James and Stephen, Mr Riady is a devout Christian. He has a humorous story about his conversion to the faith:

‘I once went to hear a preacher called Dr Steven Tong. At the time, he was preaching that every man is sinful. I thought, he doesn’t know me, that’s why he is saying every man is sinful.

‘At the end, the preacher asked the audience: ‘Who here has truthfully paid all their taxes, raise your hands. Nobody raised their hand. Then I realised that I am not a good man.

‘Then he asked a second question. ‘Among the men present here, who has never lied to his wife, raise your hand.’ Again nobody raised their hand. Then I realised I was a sinful man. Since then, I became a Christian.’

After he turned 60 in 1989, Mr Riady relinquished day to day management of his businesses to his sons. ‘The most important thing I taught them was how to build their own management teams,’ he says. ‘Up to now, they have had very good teams. I am fully confident they can manage very well.

‘But I am not fully retired,’ he adds. ‘I still watch. For every single unit of business in each company, I look at the standard operating procedure. And for each person, I focus on one simple thing: what is your duty and how do you do it. That’s all. I believe that as long as every person in a company understands very well what is their job and how to do it properly, the company will do very well.’

MOCHTAR RIADY

Founder and chairman, Lippo Group

Born in Malang, Indonesia, May 12, 1929. Now resides in Jakarta

Educated at Southeast University, Nanjing, China

Married with six children

Estimated net worth: US$730 million (Forbes, December 2010)

1959-1990 Career in banking. Headed Bank Buana, Panin Bank, Bank Central Asia

1950s Founded Lippo group in Indonesia

1980-present Managed Lippo Group’s expansion from Indonesia to Hong Kong, mainland China, Philippines, Singapore and South Korea

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3. My first Groupon(Singapore) deal bought!

httpvh://www.youtube.com/watch?v=LXO-jKksQkM

Haven’t been posting here for quite a long while! For one, I’ve been a little caught up with work! For those not in the know, I actually changed jobs earlier this month, and it was quite a fun training period! Just felt a little inspired to blog a bit, because of this nice video as well as the training today.

One of the interesting concepts today was the idea that being assertive does not equal being agressive. Quite interesting if you ponder about it. You can be very assertive in life, but you don’t have to be agressive. It also led me to the concept of Agressive Submissive. In fact, if you think about it, most people in the world are agressive submissive. They are not assertive and thus not able to bring across what they want to say. So they let things happen to them. But when things do happen, they become agressive and fight, rather than trying to solve the problem. Hmm.. not too sure how to explain it though. Anybody understands that concept?

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4. Progress update: Week 10 of Tim Ferriss Slow Carb Diet

httpv://www.youtube.com/watch?v=OAgRfg4FlMM

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SINGAPORE: Dr Tony Tan has been elected Singapore’s seventh President, winning by a 0.34 per cent margin, or 7,269 votes. 
He secured 744,397 or 35.19 per cent of total valid votes, while Dr Tan Cheng Bock received 737,128 or 34.85 per cent of the valid votes.

It was a long and widely followed election. Being one of those years where there was a General Election (in May 2011) and a Presidential Election (in August 2011), the social media buzz was loud and furious.

Mr Tan Kin Lian was one of the first few to have utilised social media. Earlier in the year, he was suddenly very vocal about topics and had started to attract interest to his name. He started talking about investments, then about insurance. Ironically, he was slamming most insurance products even though he was the CEO of NTUC Income. He also started to appeal to the unsophisticated investors by showing that he will be the evangelist that fights against the big bully, be it the big corporations, the governments, etc.

Mr Tan Jee Say was the next to have increased his social presence. He came out to compete in the General Election as a candidate for the SDP. I wrote a fair bit about him with regards to one of his rally speeches. I personally feel that he has a good head on his shoulder, with ideas that have a high possibility of working. However, being the President might not be the right office for him, and he might be better off as a MP. Unfortunately the SDP reputation wasn’t particularly good, and that might have cost him some points. But being the way he is, it is also unlikely that WP will be a good match to his confrontational style.

Dr Tan Cheng Bok also came out during the General Election. He already stepped down from active MP duties earlier on, but I told my friends that he was one of those competent PAP members still around today. It was then that I discovered his website and read up more about him too.

Dr Tony Tan is someone people would know. He was probably already known by all Singaporeans, but didn’t have a special social presence. In fact, if you googled Tony Tan last week, you wouldn’t have been able to find his official website. This basically shows the lack of social online presence among the older folks. To that extent, how the incumbent government has been a little backwards with regards to online interaction.

In the earlier days of the election campaigning. I thought of voiding my vote. Simply because it didn’t really matter to me which guy will be President. If anything, I would like to strike off Mr Tan Kin Lian from my list, and then any of the other 3 would do. Later on, I was just listening to all the speeches and went to talk to some of my friends. That was roughly when I concluded I didn’t really want Mr Tan Jee Say to be the President.

I envision the role of the President to be like that of the chairman of a corporation. In economic ideals, a chairman is the lead independent non-executive director. As compared to the CEO, which is the lead executive director. So what does that mean to me? Basically that means the other directors will listen and agree with what he says because he is the lead director. This applied to both the PAP and the opposition members. Independent basically means he takes in the concern of all the stakeholders. This is important, because it seems people want the president to take in the concern of themselves, while neglecting the concerns of other stakeholders. Of course, he shouldn’t act in proxy for the government only, that would defeat the purpose of being independent. Non-executive basically means he is not concerned by the day to day operations of the corporation. His job is to provide influential insights to the direction and role of various people in the corporation, thus his authority as stated in the constitution.

In this sense, I don’t think Mr Tan Jee Say was an ideal candidate. He was not old enough to have the experience to influence. Besides Nicole Seah which is like a star struck fan, I don’t believe he has enough influence among the opposition even, let alone the incumbent PAP members. He is also a fairly confrontational and emotional person. In one of his interviews where he was debating with Dr Tony Tan, he was not able to maintain his cool which I thought that that was something a President should have.

httpv://www.youtube.com/watch?v=1vshMBvcfQw

Eventually I was undecided between Dr Tan Cheng Bok and Dr Tony Tan, up till the moment I walked from my house to to the polling centres. Both are very very good candidates. Both has it’s disadvantages. Let’s admit it first. Politics is never a clean game. In the last few days, I have found dirt on every candidate and how some underhand measures were used. But that’s basically the way politicians has been since the beginning of time right? Look at Bangkok, UK, USA, France, etc. All politicians have a power struggle. Some very underhand means have been used before, and that includes staging an event that your opponent is convicted due to alleged rape and thus lowering his reputation. Don’t think the opposition are as helpless as they present themselves.

Dr Tan Cheng Bok has quite a lot of grassroots support and I admire his style. He presents himself as a very grandfatherly figure. Someone that dishes out care and advice. He has built his campaign very well, especially his use of social media at his age. His campaign manager and team must be very good.

httpv://www.youtube.com/watch?v=LXectjaGuHI

Dr Tony Tan is still well respected in the business community and among the business leaders of society. I believe he also has the experience to share, the only question is how proactive he is. I do hope the current polling results will create a more active Presidency.

In my opinion, there is too much PAP-hate in the social media. No matter, we gotta view things in a neutral light. “65% of Singaporeans voted against Dr Tony Tan, he’s going to lack legitimacy” But then, *any* candidate would have 60+% voting against them right? A lot of young people voted against Dr Tony Tan, but he still won, doesn’t that mean that there are some other people who voted for him? Is your voting rights worth more than others? Are you saying that other people are so stupid that they don’t do their own analysis? That people will follow endorsements without thinking? That you are the only smart one that chose the correct candidate? There seems to be a lack of sportsmanship nowadays. In the past, when someone won a sporting event/battle/debate, people come round and shake hands and be merry. Nowadays, people sulk. They don’t accept other people’s opinion on why the other person won. We need to have a more open mind.

What we need to do going forward is to contribute more to society, not trying to attack it. I have mentioned many times before to many  people. Somehow there seems to be a rise of social unrest, not just in Singapore, but all around the world. Who would have thought there would be riots in UK? Who would have thought that there would be 20-30% unemployment in some of the most beautiful parts of Europe? I hope we don’t get to see that in Singapore.

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Gotta get my engine started again..

This guy is pretty amazing!

httpvh://www.youtube.com/watch?v=qjCLQaTFXx0

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In a blink of an eye, it’s week 10 already!

I was actually away on a overseas holiday to Bangkok on week 8, which I blogged about it, here, here, here, here and here! It was a very good trip!

I also stopped the diet during that trip and practically binged all the way. The days after I got back from the trip till today, I went back to the diet, but I didn’t do any exercise, since mygroupon membership for the gym ended already. Probably would need to start looking for a gym!

Anyway, Quick Recap,

Week 0 : 80.6kg, 24.6% BF, total inches of 268.0cm.

Week 1 : 78.7kg, 24.5% BF, total inches of 260.4cm.

Week 2 : 78.2kg, 23.4% BF, total inches of 261.9cm.

Week 3: 77.5kg, 23.3% BF, total inches of 260.7cm.

Week 4: 76.7kg, 23.1% BF, total inches of 259.6cm.

Week 5: 75.8kg, 21.7% BF, total inches of 258.2cm.

Week 6: 76.0kg, 21.6% BF, total inches of 256.5cm.

Week 7: 75.7kg, 22.2% BF, total inches of 255.0cm.

Week 8, 9: no records

Week 10: 74.7kg, 22.3% BF, total inches of 253.0 cm.

Pretty good!

You can imagine my surprise when I saw that my weight dropped! However, body fat percentage seem to be climbing, which might mean that my weight drop is at the expense of my muscle mass. Ugh.

The 3 month point is also approaching fast. In the next 2 weeks, I’ll probably try to keep the diet strict, and to engage in more gym work, before taking a blood test again at the end of week 12/13.

Wish me luck and I would love to hear how everybody else is doing on the diet!

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Bangkok Sky Restaurant is located on the 76th and 78th floor of Baiyoke Sky Hotel, which is really walking distance from Platinum Mall. My hotel was rather far at Asoke, so taxi was probably the best way for me.

Food wise, it was really quite underwhelming. The standard finger foods, 1 station for japanese sushi/sashimi, 1 station for pad thai, 1 station for pasta (which is probably one of the better choices), 1 station for thai noodles, 1 station for grilled meats, and the usual dessert and beverage booth. But I guess for 840baht, the view makes it worthwhile.

They also had balloon entertainers walking around to make complimentary balloon shapes to entertain the kids. I felt that was a refreshing thing to see since most of the crowd tend to be tourists and tourists just like to be entertained.

The views from the 78th floor were great!

In the 3rd pic, the dark green patch in the middle-left of the picture close to the horizon is Chatuchak

In the 4th pic, Amari watergate, Platinum mall, Central world is right at your doorstep!

No matter, as long as you taper your expectations about the food, it is actually fairly decent. The views more than make up for it. In fact, you can go to the 84th floor, which is a revolving open air rooftop with a view of the entire bangkok horizon!

With that, it was time to head back to Singapore and to earn money to fly back to Bangkok again! )

Related posts:

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2. Sights, shopping and massage in Bangkok – Day 4
3. Sights, shopping and massage in Bangkok – Day 1
4. Sights, shopping and massage in Bangkok – Day 3

Suan lum night market has been one of the ‘must visit’ places in Bangkok for a tourist to go. However, the land lease expired in 2007, and the tenants had been illegally occupying the landtill Jan/Feb of 2011 before they were all chased away. And suddenly, there’s nowhere to go to experience the night market atmosphere in Bangkok!

In the recent months, the closest replacement is Tawanna Square, which is somewhat like a wholesale center but extended outdoors using tentages.

The day started with a quick visit to the tailors to do the fitting for my orders. For people who do tailoring while skipping the fitting session, you might as well just buy off the shelf. The fitting for both the tailors I used were quite good, but as expected, alterations had to be made in order for it to be better fitted.

A quick meal at Pasta ‘n’ Noodles was surprisingly good! It was just one of those restaurant type places along the road near Nana BTS. The food looked decent and the price was good, so we went in. And as usual, we were the only customers in the restaurant. Now I’m wondering where do locals eat!?!

After that we made our way to Phetchaburi MRT station to get to Asoke Pier which was just walking distance away. One of the unique feature of Bangkok is how river transport is an essential form of transport there.

From 1 end of the river to the other, it’s probably around a 80 minutes boat ride, and if you were to travel the same distance on taxi, it would have probably cost 200 baht and maybe 2 hours given the traffic congestions!

Tawanna Square is located right beside Mall Bangkapi, which is a pretty large mall in a suburban type of district. But most importantly, it has it’s own pier! Being tourists, it makes more sense to ‘do as the locals do’ and take the boats rather than to rely on taxis right?

There’s basically 1 pier at every stop location. Thus, the boats from both direction will stop at the same pier, and you gotta make sure you don’t get onto the boat travelling in the wrong direction! Once it approaches the pier, the 2 operators of the boats will just sling ropes to pull the boat closer, and within 1 minute, if you’re not on the boat, it would have left without you! Most of the locals even got onto the boat while it was moving! Once you’re on the boat, the operator will then walk along both sides of the boat to collect the fare. Our fare from Asoke pier to Mall Bangkapi pier was a 40 minutes boat ride and it costs only 17 baht. We actually passed the Mall yesterday on our way to Siam City Park, and by my estimate, a taxi ride would have cost 100 baht for the same distance.

At first, we were worried of missing our stop, since the signboards were in Thai. But Mall Bangkapi is really quite a big building, so in most likelihood,  you won’t miss it!

If I were to compare a mall, Mall Bangkapi would be fairly similar to NEX Serangoon. Full of locals, lots of F&B outlets, and lots of bustling activity. Tawanna Square would then be something you don’t see in Singapore.

It has everything ranging from apparels, performance costumes, novelty items, food, drinks, mobile phones, electronics and even sound systems for cars! In fact, you can even get hair extensions or tattoos done right at Tawanna! In my opinion, I would much prefer Tawanna Square compared to Chatuchak. At least there is a shopping mall right beside where you can go for some nice buffet once you’re done walking!

Unfortunately the boat service stops at 8.30pm. We decided to take a taxi to Hua Mak Airport Railway Link station, and then taking the ARL to Makkasan and switching to MRT since there is probably going to be traffic congestion at Sukhumvit Road again.

Onward to Day 5 and the last day of the Bangkok trip!

Related posts:

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2. Sights, shopping and massage in Bangkok – Day 5
3. Sights, shopping and massage in Bangkok – Day 1
4. Sights, shopping and massage in Bangkok – Day 3