Quora Answer: Can You Explain the Need to Separate Religion from the State?

The following is my answer to a Quora question: “Can you explain the need to separate religion from the state?” 

We can safely say that at any time we have had overt religious values influencing the legislative and judicial process of the state, it has always lead to some form of oppression and corruption, particularly detrimental to minority voices.  There is nothing inherently wrong with religion as a spiritual force.  It has always been good.  There tends to be tremendous corruption of religion when it becomes organised, and a power structure is put in place. 

Lord John Emerich Edward Dalberg-Acton, 1^st Baron Acton, an English Catholic historian and politician, observed, “Power tends to corrupt, and absolute power corrupts absolutely.”  Organised religion does not only grant men power, but the façade of morality, where they imagine they speak on behalf of God. 

As Anne Lamott, the American novelist, correctly said, “You can safely assume that you have created ‘God’ in your own image when it turns out that ‘God’ hates all the same people you do.”  People of religious power tend to disregard god, and make themselves, first, spokesman of the Divine, and later, elevate themselves to arbiters of orthodoxy and morality.  That is very dangerous. 

Theocracies, by their very nature, are inclement to change, and hostile to the idea of freedom of thought and speech.  They manufacture a majority on any issue of doctrine, and invoke the supernatural to crush dissenting voices, delegitimising them as heretics or disbelievers.  That is not the basis for serious dialogue and deep consideration of issues, advances in technology, and discoveries in science.  Since religions invoke the supernatural as a basis of doctrine, inconvenient facts are disregarded. 

Religion works best when it is private belief, and a code of ethics.  It cannot be a basis for much of modern legislation, and policymaking.  The problem with scripture is that we are held hostage to the prism of the interpreter of the Divine Intent.  A person with an occluded heart will see the justification for all his prejudices and biases, and that is most people.  Power structures attract materialists and the ambitious, not necessarily the most ethical.  These are not the people we want, interpreting scripture as a basis for governance. 

The state should be secular in all its branches, whether executive, judicial or legislative.  Policy and legislation should be formulated on the basis of available facts, projections, logic, and sound values.  These are largely common to all humanity.  We can have our own interpretation of scripture, but no one has a right to their own set of facts.  That is the ideal.

Quora Answer: Why is Singapore Considered a False First World Nation?

The following is my answer to a Quora question: “Why is Singapore considered a false First World country, considering that it obtained its economic strength through banking and trading, not through industrial and technological strength?” 

Singapore was never a First World nation.  “First World” is a term from the Cold War, referring to nations aligned with NATO.  The Second World were nations of the Communist bloc aligned with the Warsaw Pact, or China.  Singapore, as a member of the Non-Aligned Movement, was neutral, and thus, Third World. 

Officially, Singapore could be classified as a high-income developing country, or a newly industrialised economy.  It is useful for Singapore to maintain that status.  It also allows Singapore the option of exploiting WTO and other supranational organisation provisions for developing nations, giving the country an advantage.  Singapore has strenuously denied taking advantage of those provisions.  These classifications are essentially a joke.  The IMF, the HDI, the OECE, the World Bank, and others all use different metrics.  According to the Human Development Index, Singapore is developed, being near the top of the list.  According to the OECD, and the WTO, Singapore claims to be a developing nation. 

This claim of being a developing nation of any sort is belief by the fact that Singapore is one of the few countries with a AAA credit rating, and the only one in Asia.  Not even Japan, South Korea, or China has it.  It also sits on the world’s tenth largest foreign reserves, and is one of the world’s top creditor nations.  It has of the 4^th highest GDP per capita in the world.  Singapore is the 3^rd largest oil refinery market, and one of exports high technology products.  The semiconductor industry is more than 5% of GDP.  It is also a centre of chemical engineering, biotechnology, and the biomedical sciences, with some of the most advanced facilities in the world.  Singapore is also one of the top arms exporters in the world, specialising in advanced, and specialised equipment.  This is in addition to having the busiest port and airport, and being the fourth largest finance centre in the world.  In summary, the fact that Singapore claims to be a developing nation in any guise is a bit of a running joke.

Market Overview, Last Quarter 2020

The following is my analysis of the market, and how your investments through me are expected to perform in the quarter.  I make it a habit to write these reports every quarter or so, and explain the reasons why we have positioned your portfolio such in the market. 

Before we consider where we are going, it is important for us to understand where we are.  It is important to reiterate that all investments through the vehicle of AIA and its designated fund managers, your investment-linked plans, whether CPF, SRS or cash, have an extended investment horizon in mind.  As such, we do not pay much consideration to volatility in the immediate term.  Over an extended investment horizon, the market corrects itself.  What we need to consider are inflation, macro-economic growth, currency exposure, and political risk at the point of exit. 

The structure of the investments are what I call the shovels and jeans approach.  A suitable analogy would be the California gold rush of 1848 to 1855.  Thousands of people, came from many parts of the world to look for gold.  Some made it, many did not.  However, the ones that sold them the shovels, the jeans, the wheelbarrows, and such – they were the ones who were guaranteed to make money, and they did.  This is how Levi Strauss got his start.  In the same vein, we can consider, for example, handphones.  Now, when we think of the latest handphone companies, we think Apple.  Once upon a time, it was Motorola and Nokia.  That is the nature of the market,  Investing in brands has an inherent volatility because consumer tastes evolve, and these companies may not necessarily be able to maintain that market leadership.  But when we invest in the underlying technologies, the chips, for example, it does not matter which brand has market share – they all use the same underlying hardware.  That is investing in “shovels and jeans”, and that is my philosophy when allocating your funds. 

Since the lows of March, when the market hit bottom, we have had an extended bull run, that seems divorced from the underlying economic data.  That is not a reality.  Much of that drive in the market comes from technology stocks taking advantage of the massive, enforced shift in consumer habits and discretionary spending.  Retail and travel may be on life support for the moment, online retail, and consumer discretionary spending in the virtual sphere is very much alive.  It is the nature of people.  We can enforce a lockdown due to the pandemic, but people still need to eat, to interact, to be entertained. 

Concerns about climate change, and the global economic contraction has affected the energy industry, forcing a shift towards renewable and sustainable energy.  We are expecting oil prices to start returning to pre-pandemic levels at the end of 2021, and that is still, in my opinion, being optimistic.  There are a lot of Petrobonds that will be due this year and next, requiring reinforcement, in danger of default.  We still have oil from Libya, Syria, and Iraq to come into the world market.  And OPEC has not cut production enough.  Their concern is that they have stock of diminishing value they need to offload.  All this means there will be tremendous growth in renewable energy. 

Finally, the next gold rush is the search for a viable vaccine that can be mass produced.  Any news of positive vaccine progress boosts stocks, more out of hope than reality.  A vaccine itself is not enough to bring economies back to pre-pandemic levels, but it would be a massive boost to the market.  It is estimated by the Congressional Budget Office that the pandemic slowdown has cost the US economy almost US$8 trillion over the next decade.  It has cost Singapore US412 billion a day thus far.  Current investment in vaccines stands at close to US$4 billion.  There will be tremendous growth in pharmaceuticals, hospitals, and biotechnology research. 

We must consider that we are looking at one of the most volatile elections seasons in the US history.  This is not, however, going to have much of an effect on the market since, in an age of a Trump presidency, we expect volatile elections.  What we are hoping for, however, is a change of administration, and an end to the trade war, and uncertainty.  A threatened decoupling between the two largest economies in the world helps nobody.  Because of their inept handling of the pandemic, I would be surprised to see a Trump win. 

In the meantime, the Federal reserve has moved away from a hawkish position on inflation, and is focused on stimulating growth first.  This means a continuation of stimulus packages, including some of corporate bond purchases through the ETF, which will guarantee the market to junk bonds by default. 

In Europe, we still have the uncertainty of Brexit, and an idiot administration in the UK threatening to tear up international agreements.  Much of Europe is seeing increasing cases of Covid-19 infections putting paid to hopes of any major economic opening soon.  We are waiting for the ECB to commit to a series of further stimulus packages.  As such, there is negligible exposure to Western Europe. 

Back in Asia, I have put no investments in South Asia, West Asia, and the Middle East.  Considering the mandate of the funds invested through me, I see no value there for the added risk, and the political exposure is too high.  For example, South Asia, when we consider the economic policies of India, Sri Lanka, and Pakistan, they are short-sighted, and constitute self-sabotage.  My clients have no exposure to these markets, because I have no faith in them. 

East Asia, however, is where the money is.  This was the region that was first hit by the pandemic, and the first region to gain some semblance of control over it.  This will be the first region to open.  Looking at the progression over the next 20 to 30 years, this will be the economic driver for the world, and I see tremendous opportunities in the region.  Much of my confidence is also based on my extensive network with fund managers, policy makers, and persons of influence in the region, and gives us some certainty. 

With the current issues in Hong Kong, we are seeing funds pivot to Singapore, away from it.  The current trade spat between the US and China means that funds are either doubling down in China, or hedging their bets, depending on their focus and strategy.  Those that are not doubling down will pivot to Singapore.  We will also see more funds pivot from Europe and North America towards East Asia to position themselves for the first wave of an excepted economic recovery.  While we are still looking at a long-U recovery, it makes sense to preposition for a long bull run. 

Over the next decade, we can expect Indonesia and Vietnam to grow as manufacturing hubs as China moves further up the value chain.  Prior to the pandemic, Indonesia was expected to see double digit growth in manufacturing.  The market fundamentals have not really changed, and we expect that growth to pick up again. 

In summary, changes to consumer behaviour are permanent, and the world post-pandemic has changed.  As such, technology, online retail, renewable energy, pharmaceuticals, biotechnology, medical tourism will increase.  Travel curbs will take years to ease so airlines, budget travel, traditional retail, commercial property, and oil and gas will take years to recover.  Growth will be driven East Asia and South East Asia, and will continue to have major weightage. 

In terms of funds, my recommendations are the AIA Global Technology Fund, the AIA Regional Equity and AIA Fixed Income Funds, the AIA Greater China Equity and AIA Greater China Balanced Funds, and the AIA Acorns of Asia Funds.  They have done well, and are expected to continue to deliver value.  I am also recommending the AIA Global Dynamic Income Fund on the strength of the fund managers. 

Across all my clients, the average growth has been 7% to 9% in the last quarter, with the majority being balanced, as opposed to adventurous.  There will be some market correction in this period, which means some contraction in value, but this will not be sustained.

Quora Answer: With Just Artillery Strikes, Would Singapore be Gone?

The following is my answer to a Quora question: “Is the saying, ‘With just artillery strikes, Singapore would be gone’ true?”

Whoever came up with this nonsense does not understand how artillery works.  When it comes to artillery there are two places where artillery pieces can be placed to bombard the main island of Singapore, known as Pulau Ujung.  They are Johor, and Batam, in the Riau Islands.  The distance from Batam is just over 30 km.  Johor is separated by the narrow Johor Straits.

Now, we consider the possible belligerents.  Malaysia has less than 300 pieces of artillery, with 50 Astros MLRS from Brazil, which is unguided.  Malaysia does not make its own ammunition, and they have to import.  Because their artillery pieces come from places as diverse as Brazil, South Africa, the US, and Italy, logistics supply chain is a major problem.  Indonesia has over 500 pieces of artillery.  However, less than 100 of them can hit Singapore from Batam, including, ironically, the Singapore-manufactured FH-200.  Indonesia fields the same Astros MLRS as Malaysia.

Considering the size of Singapore, how densely built up it is, and the fact that all infrastructure is deliberately overbuilt, and reinforced, one artillery barrage is definitely not enough to do more than inconvenience the country, and cause minor civilian casualties.  From a tactical perspective, it would be impossible for either nation to gather their artillery within firing distance, and not be noticed by Singapore’s military intelligence.  Neither nation is known for subtlety, being geared more for defensive policing action, in the case of the MAF; or to fight provincial insurgencies, in the case of TNI.  Both armed forces do not emphasise a doctrine of confronting a near peer or better adversary.  Singapore is technologically superior.

In contrast, Singapore has four battalions of artillery.  They field superior, modern pieces from howitzers to GPS-guided MLRS.  If Singapore is in range of their artillery, their artillery is definitely in range of Singapore’s.  We must also consider that unlike Indonesia or Malaysia, Singapore has invested heavily in tracking technology for accurate counter battery fire.  The Singapore artillery formations also have regular drills, and Singapore manufactures its own pieces and ammunition, meaning that they have no supply chain complications.  All of Singapore’s command and control elements are in hardened bunkers, or underground complexes, with redundancy.  Singapore is also backed with the strongest air force and navy in Southeast Asia.  Finally, Singapore possesses the Iron Dome II.

In terms of military doctrine, due to Singapore’s first strike policy due to the lack of strategic depth, Singapore is not going to wait for these artillery formations to fire on Singapore before retaliating.  Once the hostile intent of the deployment is verified, the SAF would attack first, and ask forgiveness later.