The world order over the past three decades is based on globalisation and free trade.
It has created growth and development in many countries.
It has also created gross inequality. The gap between the haves and the have-nots has grown wider than ever. According to the Credit Suisse Global Wealth Report 2018, the top 1% of adults account for more than 47% of household wealth globally.
Many countries are in debt, including the super power America. This is an unstable situation.
Globalization allows the super rich to transfer their earnings and wealth to tax havens, making it difficult for governments to levy the tax that is necessary for them to provide the public services for their citizens. It gets worse every year.
America is finally reacting to this situation in a dangerous manner. It is imposing arbitrary trade tariffs. It is withdrawing from multi-national agreements. It has started a trade war with China.
The American reaction does not address the root problem. It will make the unstable situation worse by adding the risk of armed conflict.
What is the solution?
We have to return to the system before globalization. Each country should introduce tariff to generate revenue for the government and to protect its local industries and jobs.
This system worked well for three decades prior to the era of globalisation. It has generated wealth and development as well. America build its great society and infrastructure during this period.
I know that we are now in a different world with global supply chains. The global supply chains can continue. The introduction of tariffs mean that the multi-national corporations will have less opportunity to take advantage of the loopholes in the taxation system to generate huge profits at low taxes.
After paying their share of taxes and tariffs, they will still remain profitable. The global supply chain will still make business sense. The operations will continue as before. The MNCs will know how to make the appropriate adjustments.
Government with a more stable source of revenue can play their part to build the infrastructure and housing for the people and provide the necessary public services, such as health, education, safety and social welfare.
Countries will also have to make their adjustments. The bigger countries, with a population of more than 50 million are viable to be on their own. Other countries with smaller populations have to join an economic bloc, similar to the European Union. The smaller countries of ASEAN will have to form an economic bloc.
For a start, Singapore has to work more closely with Malaysia. We may have to consider re-merger some time in the future.
If we divide the 70 years after World War 2 into two eras of 35 years, we may be approaching the end of the era of globalisation. We may have to consider another economic arrangement where tariffs will play a bigger role. It will be better.
Tan Kin Lian
It has created growth and development in many countries.
It has also created gross inequality. The gap between the haves and the have-nots has grown wider than ever. According to the Credit Suisse Global Wealth Report 2018, the top 1% of adults account for more than 47% of household wealth globally.
Many countries are in debt, including the super power America. This is an unstable situation.
Globalization allows the super rich to transfer their earnings and wealth to tax havens, making it difficult for governments to levy the tax that is necessary for them to provide the public services for their citizens. It gets worse every year.
America is finally reacting to this situation in a dangerous manner. It is imposing arbitrary trade tariffs. It is withdrawing from multi-national agreements. It has started a trade war with China.
The American reaction does not address the root problem. It will make the unstable situation worse by adding the risk of armed conflict.
What is the solution?
We have to return to the system before globalization. Each country should introduce tariff to generate revenue for the government and to protect its local industries and jobs.
This system worked well for three decades prior to the era of globalisation. It has generated wealth and development as well. America build its great society and infrastructure during this period.
I know that we are now in a different world with global supply chains. The global supply chains can continue. The introduction of tariffs mean that the multi-national corporations will have less opportunity to take advantage of the loopholes in the taxation system to generate huge profits at low taxes.
After paying their share of taxes and tariffs, they will still remain profitable. The global supply chain will still make business sense. The operations will continue as before. The MNCs will know how to make the appropriate adjustments.
Government with a more stable source of revenue can play their part to build the infrastructure and housing for the people and provide the necessary public services, such as health, education, safety and social welfare.
Countries will also have to make their adjustments. The bigger countries, with a population of more than 50 million are viable to be on their own. Other countries with smaller populations have to join an economic bloc, similar to the European Union. The smaller countries of ASEAN will have to form an economic bloc.
For a start, Singapore has to work more closely with Malaysia. We may have to consider re-merger some time in the future.
If we divide the 70 years after World War 2 into two eras of 35 years, we may be approaching the end of the era of globalisation. We may have to consider another economic arrangement where tariffs will play a bigger role. It will be better.
Tan Kin Lian
2 comments:
Even LKY realised eventually Singapore has to merge with Malaysia again,
for the future survival of our little red dot.
Many Singapore folks are short sighted, they still insist we would and can continue to do well on our own.
It's a matter of when and how on rejoining, Dr M's mortal time limited, he would bring the historical baggage together with him.
No shame,get kick still want to return.Want to get rape also??
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