Quora Answer: What are the Defense Problems Faced after Singapore’s Independence?

The following is my answer to a Quora question: “What are the defense problems faced by Singapore after independence?” 

When Singapore gained independence in 1965, it had no military, no indigenous defence industry to support such a military, no funds to grow either, and it lacked population homogeneity for unity.  These conditions all but guaranteed that Singapore would eventually be absorbed by a larger neighbour, or be reduced to client status by them or a foreign power.  It is a testament to the brilliance of the government that these issues were addressed, along with the strategic considerations that arose from addressing these issues.  Not enough study is done on the leadership required to get this done, bringing an impoverished island with no resources to its current status as a regional military power with force projection well beyond what is expected. 

Malaya had just about won the Communist Insurgency, and defeated the Malayan Communist Party, although the PAP still had leftist elements then.  Further to that, Singapore and Malaysia were involved in an undeclared conflict with Sukarno’s Indonesia, called the Konfrontasi.  On the 10^th March 1965, MacDonald House, in Orchard Road, was bombed by Indonesian commandos who had infiltrated the country.  This meant Singapore’s most hardened troops were at the Borneo border. 

When Singapore separated from Malaysia, the divorce was painful.  In the election prior, when the PAP campaigned in Malaysia for a “Malaysian Malaysia”, instead of a “Malay Malaysia”, UMNO were outraged and played the race and religion card.  The main instigator was Syed Jaafar bin Syed Hassan Albar, the so-called “Lion of UMNO”.  He was a radical Malay supremacist, despite the fact that he was clearly Yemeni Arab, and not Malay.  He was vehemently against Singapore’s separation from Malaysia, and resigned as secretary-general of UMNO in protest.  He went as far as to advocate that Malaysia militarily occupy Singapore. 

At the time of Separation, almost half of the troops based here were from Malaysia.  When the British gave control of the various units to Singapore, Malaysia and Brunei, they neglected to consider that the units were recruited from all over the Malay Peninsula.  We had Singapore-born Malays and Malaysian-born Malays in the armed forces and the police.  The 4^th Malaysian Infantry Brigade consisted of two infantry regiments of about 1,000 soldiers each.  Just over half of them were Malaysian, and they had divided loyalties.  They were commanded by Brigadier-General Syed Mohamed bin Syed Ahmad Alsagoff, a relative of Syed Albar, and another Yemeni Arab.  To say that he did not get along with Lee Kuan Yew is to put it mildly.  He claimed it was a joke when he told Lee Kuan Yew that he could have had the PAP leaders arrested and shot.  Lee Kuan Yew and his family moved out of the Istana and borrowed the Gurkha Regiment to guard them. 

The Malaysian troops, all ethnic Malays, mutinied.  Just over half of them supported Malaysia.  One of the Singapore officers was killed.  It was Col. Alkaff, BG Alsagoff’s cousin, who negotiated a withdrawal of the Malaysian troops.  The 4^th Malaysian Infantry Brigade withdrew from Singapore by November of 1967.  The murderers of the Singapore officer were arrested.  Two were hanged, and the others were only released from detention a decade or so ago.  This situation highlighted the fact that Singapore could not trust the leadership of Malaysia.  This shaped our strategic thinking. 

Compounding all these issues, on the 16^th January 1968, Prime Minister James Harold Wilson and his Defence Secretary, Denis Winston Healey, announced the withdrawal of British military assets from east of Suez.  This meant the loss of British military support in Singapore, and the loss of tens of thousands of jobs, further exacerbating the insecurity and poverty. 

Singapore began in extremely difficult circumstances.  We are bereft, alone, and without friends.  We were surrounded by countries that we had recently had conflicts with.  We were a nation of immigrants, with no common cause.  We were susceptible to foreign domination.  If there was one thing we had, it was leaders of rare ability, led by Lee Kuan Yew.  They sold the people the promise that the sacrifice of that generation would be the foundation of future prosperity.  They delivered an honest, efficient, authoritarian government.  That generation put in place the values that built this nation.  Our challenge now is to live up to their values, to make their sacrifices worthwhile, to honour them – and to continue to work towards brining Singapore to the next level. 

Today, we have a prosperous, stable nation.  Because of the scarcity mindset of those early days, Singapore built up huge reserves, created a military budget that dwarves its neighbours, and invested in next generation technologies to create a military industrial complex that is one of the best in Asia.

Economic Insights for April 2022

The following are some economic insights for April 2022.  We must acknowledge that Russian military action in Ukraine had resulted in impulsive reactions in the market, which has dampened risk sentiment.  The markets have been unclear as to how the situation will develop since the war commenced in late February.  There continues to be further escalation of sanctions by the West. Peace talks between the two sides are still inconclusive.  This has the direct consequence of higher commodity and energy prices.  Central banks are caught between a rock and a hard place: either curb inflation or support economic recovery.  As a result, we are experiencing higher than expected inflation, dampening growth. 

On the other hand, monetary policy normalisation has accelerated further in the March.  Several key central banks have announced more interest rate hikes in a shorter period of time than expected previously. More are expected to follow.  While current inflation pressures are created by a series of shocks, such as Covid-19 and the Ukrainian invasion, central bankers are concerned by second round effects, such as the wage-inflation feedback loop, if current inflation is not addressed. 

GDP growth will likely remain above potential in 2022, but the conditions of the market from 2020 implies an apparent decline in growth compared to 2021.  This combination of supportive growth and aggressive monetary normalisation creates an unstable configuration for equities.  Bonds will rebound in real rates, maintaining a downward pressure on returns, although a significant part of this process is already reflected in prices. 

Asset allocation decision remains one of the largest drivers when determining the range of portfolio outcomes amid these volatile markets.  Thus, the backdrop of strong macro fundamentals remains a valid narrative for risk assets to outperform in 2022.  Among the various risk assets, profit margins and return on equities continue to reach record highs for all markets, especially for the US and Eurozone.  Meanwhile, earnings revisions and breadth have started to look more favourable for Asian markets.  China’s easing of monetary policy, coupled with the new shift in Covid strategy from Covid-zero to “dynamic zero”, and the support from state-backed funds to buy China A shares are early signals to the beginning of a more sustained recovery in the region.  Or, at least we hope. 

In summary, equities are expected to record above-trend growth among major developed economies.  This is expected to continue in 2022, supporting the momentum on earnings growth.  This is also expected to withstand the impact of the Federal Reserve hike to equity valuation.  In essence, markets may have quickly priced in the risk of monetary policy normalisation.  This has cleared the way for risk asset outperformance.  As such, earnings expectations have started to look more favourable for Asian markets supported by reopening of ASEAN economies and the expectation of more policy support from Chinse government and recovery of credit growth. 

Regarding investment-grade credit, Asian credit is likely to outperform US credit, considering the credit spread premium from Asian counterparts.  This is especially so, against the backdrop of increasingly diverging monetary policy by key central banks in the West versus the accommodative Asian counterpart, as well as the easing at the People’s Bank of China.  Tightening financial conditions in the US, higher US Treasury yield and longer duration of US Investment Grade credit relative to Asia excluding Japan, in both rate and spread terms, imply risk-reward tilts towards Asian credit over US credit. 

In terms of Treasuries, the Federal Reserve’s new pivot to focusing on fighting inflation expectations has proven to be more aggressive than expected.  The short rates have been moving upwards quicker than the long-end, causing the yield curve to flatten materially, bringing it close to inversion even though economic fundamentals remain robust in the near term.  Over a medium investment horizon, we expect higher rates volatility and weaker price performance.

Quora Answer: Is the Ruckus over the US Summit for Democracy a Sign Singapore is Unsafe?

The following is my answer to a Quora question: “Is the ruckus over the US Summit for Democracy a sign Singapore is unsafe?” 

In what way is that a sign Singapore is unsafe?  In what way was that a ruckus?  The so-called Summit for Democracy was a virtual summit hosted by the United States.  It was a cynical political ploy to create a coalition against China.  The invite list itself demonstrated nothing about the stated goals of the event, which was to defend against authoritarianism, address and fight corruption, and advancing respect for human rights.  Countries participating in the event, such as Malaysia, the Philippines, Brazil, Nigeria, South Africa and Pakistan are hardly the sort of government we associate with these themes.  The event was a joke, and did nothing to advance American interests.  In fact, it actually diminished American credibility. 

Singapore likely signalled that it did not want to be invited.  It does not advance our interests to be part of this circus.  We are non-aligned.  We are not partners in American gamesmanship unless it is in our interests.  Our non-participation is a sign of strength.  Why do we need to go out of our way to antagonise China when they are our major trade partner?  What would we gain from that?  We are already a strategic partner with the Americans in the region without blowing trumpets and advertising it.  We are not the Australians; we understand subtlety.

Quora Answer: Is the Principle of Banking in Islam Possible?

The following is my answer to a Quora question: “Is the principle of banking in Islam possible?” 

Islamic banking has two primary principles: the equitable sharing of profit and loss in any venture, and the prohibition of riba’, usury.  In principle, these are equitable considerations, and praiseworthy.  The contentions of Islamic banking is not the principles, per se, but the reinterpretation of their application within the context of conventional financial practices, and the creation of near equivalent financial instruments.  This is where is falls short. 

Islamic banks make a profit through equity participation, which requires a borrower to give the bank a share in their profits rather than paying interest. 

For example, we consider mudharabah, where one party, the bank, provides the capital, and the other party, the business owner, provides the expertise and labour.  The problem with most such contracts is that, in reality, the loss is borne by the business owner, while the profits are shared.  The bank is still a bank.  It is not a conventional business partner, and it would be impractical to consider them a silent partner in every business venture that capital is provided, and still have oversight and manage compliance.  That makes the bank another mudharib, and losses are passed on to depositors.  This system can also be abused by the business, since profits are shared.  The business simply declines to declare a profit.  This results in the bank reverting to the practices of conventional banking to get their return. 

The other common contract system is musharakah, where both parties contribute capital.  A simplified example would be a housing loan with a balanced loan to value ratio.  What it does is make the bank a partial owner of the property, which has its own legal complications.  This means that the owner does not gain ownership of the property even if he pays it all off, in some contracts, and the bank gets a portion upon sale.  In other contracts, the owner gains full ownership upon repayment of principal and interest, which is labelled “profit”.  In the case of a loan to company, the capital invested is tied to a floating rate, which are still benchmarked to conventional banking rates such as LIBOR.  This means any shari’ah-compliance is cosmetic. 

Finally, we consider the problematic definition of any and all forms of interest as riba’, usury, which is illogical.  For example, if money is lent out by a bank, we must consider that there is an inherent infrastructure cost involved on the principal lent out.  The staff need to be paid, the building needs to be maintained, the utilities need to be paid.  The bank has a right to charge some form of interest to cover that cost.  That does not inherently make it riba’.  One of the conditions of riba’ is zhulm, oppression.  For it to be riba’, there should be a financial instrument structured in such a way that the underlying asset has no value, such as what happened during the subprime crisis.  Or, in a case where the interest of the loan is well in excess of the principle paid such that the debtor would find it difficult to pay off, and the interest on that loan is well in excess of the principal lent out.  An example of the latter would be student loans from the US Federal government. 

Islamic banks, just like conventional banks, have the same limitations and considerations.  In the case of Islamic banks, they use variations of the same business practices and products as normal banks, but white label them with Arabic phrases.  They bend over backwards to “Islamisise” the same financial instruments and transactions.  They play musical chairs with the same practises.  They then appoint their own shari’ah-compliance boards, which are not independent of these same banks.  There is then a cost for two levels of compliance.  This makes Islamic banking more costly, and less efficient than conventional banking. 

We do not actually need Islamic banking as it is.  What we do need is ethical banking, a shared framework which can be utilised by banking in general, for the benefit of all.  “Islamic banking” is branding, not a reality.

Quora Answer: Is Public Speaking Part of Rhetoric or a Separate Discipline?

The following is my answer to a Quora question: “Is public speaking a part of rhetoric or is it a separate discipline?” 

Rhetoric is the ability to put forth a coherent, cogent argument, for or against a contention, with the intent to persuade the listener or listeners to a specific position.  This applies in any context, from private discussions, to public speaking.  The name of this entire discipline, is rhetoric.  Public speaking is the application of rhetoric to a wider audience, within the public sphere.  Whilst the foundational skills of rhetoric are the same in every context, the manner of application of these skills vary wildly depending on the context, the target audience, the intended outcome, and other considerations of context.  Public speaking is a part of rhetoric, but rhetoric is more than simply public speaking.

Quora Answer: Is Leadership a Soft Skill?

The following is my answer to a Quora question: “Is leadership a soft skill?” 

A soft skill is any learned attribute which helps us relate to and interact with others, to gain a positive outcome.  Soft skills, unlike hard skills, are not measureable.  You can test for engineering knowledge to qualify someone.  You cannot test for leadership and quantify it.  Competency in soft skills is found in results, often over an extended period of time. 

Leadership is a core soft skill.  Contrary to what is often believed, few people are born leaders.  What we often assume is leadership, especially among children and young adults, is often simply assertiveness, charisma, and the function of the group.  Those may be the building blocks of leadership, but they do not constitute the entirety of leadership, let alone the mastery of it.

Quora Answer: Is It Better to Talk to a Professional or Family & Friends When Making Important Financial Decisions?

The following is my answer to a Quora question: “Is it better talking to a professional or asking family and friends when making important financial decisions?” 

When you have a medical problem, you see a doctor.  Do you ask your family to vote on your treatment?  When you have a tax issue, you engage a tax consultant.  Do you discuss this with your friends?  Your family are interested parties in your personal finance.  In what universe would that be a good idea?  Your friends are not your family.  Why would you imagine they have your interests at heart?  You should also consider if they understand financial planning, investments and insurance.  If they are as ignorant as you, how is their input helpful? 

Consider the implications of people closest to you knowing your true wealth.  Do you think your spouse would not be tempted to plot your death and take your money – especially when she finds out you were boning the neighbour or the vice versa?  What happens when one child finds our that another sibling gets more from the new will?  What happens when the family finds out you intend to leave all that money to the local hippopotamus shelter?  What happens when your current family find out you intend to leave something for your children from a previous marriage?  What about that idiot cousin who has a startup, and discovers you put your money in Apple stocks? 

Never, ever, ever, ever, and I mean, ever, discuss the intimate details of your finances with anybody in your family or social circle.  That is why we have financial consultants, relationship managers, lawyers and tax consultant.  Professionals are bound by client confidentiality laws.  Your family and friends will have conversations about your money without you around.  The only time you get family involved is when they are a direct stakeholder in the decision, such as joint ownership of assets, or transfer of assets with possible liabilities to them.

Quora Answer: Is Environmental, Social, & Governance (ESG) Investing Going to Help Save the Planet?

The following is my answer to a Quora question: “Is Environmental, Social, and Governance (ESG) investing going to help save the planet?” 

ESG is not about saving the planet.  The planet will continue existing long after we go extinct.  It is an attempt to put in place values that help us manage resources sustainably so that we can maintain our civilisation.  ESG investing alone will not solve the issues of habitat destruction, climate change, and lack of sustainability.  It slows down that rate of deterioration.  It is not enough; but it is a start.  All that said, ESG investing has become, in many cases, less about substance, and more about branding.

Quora Answer: How Would a Ground-Based Army Protect Itself from a Drone Swarm?

The following is my answer to a Quora question: “How would a ground-based army protect itself from a swarm of drones?” 

Drone are not fully autonomous.  We have not invented true artificial intelligence yet.  They need to be controlled from somewhere, and that means there is an electronic data link which can be jammed, or in some cases, even hacked.  In the case of asymmetrical warfare, drones often use Wi-Fi or local bandwidths, which make them easier to jam because they are not as secure as compared to a link from satellite, which a modern military uses. 

The second consideration is that drone swarm are small.  Large drones are horrendously expensive, and the swarm size is limited by the telecommunications infrastructure.  In a war situation, much of that would either be jammed, or the local infrastructure destroyed.  The small size of the drones in the swarm also limits payload.  We are looking at small rockets, not missiles, due to weight.  We are looking at small calibre arms with limited ammunition capacity, not large calibre arms due to the recoil. 

Finally, a modern military is unlikely to travel without an air defence umbrella of some sort.  The guns that can shoot down low flying aircraft and helicopters with proximity fuses will be just as effective against drones.  Drones are most effective when used to sneak up on targets to paint it, and shoot, and then leave.  Drone swarms are not sneaky.  They are an obvious glass cannon.

Quora Answer: How Should Wealth be Split between Various Account Types for Growth & Security?

The following is my answer to a Quora question: “How should wealth be split between various account types for growth and security?” 

You are talking about diversification.  Diversification is done to limit risk and exposure by spreading investments across sectors, asset classes and geographic regions.  There is no exact method because this is dependent on many factors, such as your risk profile, your investment horizon, your investment preference, and the factors unique to asset classes, sectors and geopolitical considerations.  As such, it is impossible to explain exactly how.  You will need a financial consultant to go through that with you.

Quora Answer: How Much Life Insurance Does Someone Need?

The following is my answer to a Quora question: “How much life insurance does someone need?” 

You need as much life insurance as you deem your life, your family, and your assets worthy of coverage.  The question that needs to be asked for life insurance is in the event of death, disability, or critical illness, how much does your family deserve of your income to be replaced?  How much do you feel you deserve to maintain a modicum of similar standards of living?  In the case of death, you are not buying because you will die; you are buying insurance because the people that matter to you will live on after your demise, the causes you support, the things you believe in.  That is what the money is for.  It is about legacy. 

In the same vein, when it comes to general insurance, you are considering if anything were to happen to your assets, how much do you need to cover.  When you consider how much you are prepared to lose, to loss, to theft, to damage, to tragedy and disaster, you are most likely going to take the most coverage you can afford.  When people look at premiums first, they are either the most optimistic people in the world, or they have not considered what they stand to lose.

Quora Answer: How Long Does It Take to Find an Angel Investor?

The following is my answer to a Quora question: “How long does it take to find an angel investor?” 

It really depends on your network.  Finding an investor is not difficult if you are part of the community, or in an accelerator or incubator.  Even if you are not, there is LinkedIn, you could google and email them, or ask someone who is in the ecosystem.  It also depends on where you are.  If you are in places like San Francisco, Singapore or, indeed, any major city of a major economy, it is extremely easy. 

The challenge is not finding an investor.  The challenge is fining an investor who believes you are worth investing in, and would put money into your idea.  This is where you skills of pitching, management and leadership come into the equation.

Quora Answer: How Does Bad Leadership Destroy Organisations?

The following is my answer to a Quora question: “How does bad leadership destroy organisations?” 

There are several ways that bad leadership can destroy organisations.  The first is that bad leadership is like a virus.  Bad leaders surround themselves with bad leaders.  An inadequate leader will view any competent subordinate as a threat to their position, and will promote sycophants.  This will lead to a hollowing out of middle management, which will precipitate an eventual collapse down the chain.  Bad leaders are an anathema to institutional knowledge of the organisation.  An example would be Blockbuster, where this was one of many other management failures. 

The second is the misuse of resources.  Bad leaders are bad at strategic thinking.  This means the organisation is either ossified, unable to react to challenges, or they will institute a quick fix to paper over the cracks while pointing it in the wrong direction.  Because the underlying issues are either misdiagnosed or not addressed, they organisation will eventually lose direction, and fall to obsolescence.  This is likely a slow death.  An example would be Lehman Brothers. 

Finally, bad leaders tend to promote bad values, contrary to the long-term health and rejuvenation of the organisation.  With sycophants come the patronage system, division and backbiting, and finally self-sabotage.  In the most extreme cases, this leads to widespread lapses in ethical behaviour, leading to legal action.  An example would be Enron.

Quora Answer: How Does a SPAC Merger Work?

The following is my answer to a Quora question: “How does a SPAC merger work?” 

A Special Purpose Acquisition Company (SPAC), also know colloquially as a “blank cheque” company, is an entity created for the sole purpose of acquiring or merging with private companies within their specific mandate, such as sector, industry, region, economic classification, and capitalisation.  The intent is to bypass the initial public offering process, and its limitations.  The challenge is that the identity of the target company is unknown to the SPAC investors in a SPAC, hence the “blank cheque”. 

The process starts when entities or individuals form the SPAC, through a modified IPO process.  The mandate is outlined and marketed to investors.  In many cases, the is already a group of private investors within the network who put money in these vehicles.  The SPAC is marketed on the strength of the board and backers, since there is no information on the target entity or entities.  As such, the people involved carry inordinate influence on the process through name recognition in the industry. 

Funds are raised through relatively low pricing of shares and other incentives.  Fund raising has a target to be reached within a short period of time.  The SPAC then has to pass compliance requirements by the requisite regulatory authority the SPAC is registered at.  The SPAC then has a period to identify and initiate a SPAC merger.  That period is normally around two years.  It may be extended upon certain conditions being met, although that is not usual. 

A successful merger means that the acquired entity can be listed and traded on the exchange under the SPAC ticker, bypassing the normal requirements of IPO for private companies such as a certain market performance over three or more years, and other capitalisation requirements.  The process of the SPAC merger is the same as a normal merger.  An offer is made, and negotiations on the finer points of control are conducted with the management and shareholders of the target entity.  Failure to complete a SPAC merger within the period of time will result in the liquidation of the SPAC, and the return of funds, less expenses, to the investor.

Quora Answer: How Do I Lead an Inexperienced Team When I am Inexperienced Myself?

The following is my answer to a Quora question: “How do I lead an inexperienced team when I am inexperienced myself?” 

Leadership cannot function without some experience in that mix.  If you are inexperienced, and your team is inexperienced, you can supplement that by getting mentors and advisors.  They are there to bridge that gap in experience, and lend some credibility to your leadership.  That is the easy fix.  However, you must be a strong, assertive person.  Your role as leader must not be abrogated by these mentors or advisors, because that would be a failure of leadership on your part.  The key is to qualify your mentors and advisors, and get the right ones involved.

Quora Answer: How Do I become a Better Public Speaker & Speak with Greater Passion?

The following is my answer to a Quora question: “How do I become a better public speaker, and speak with greater passion?” 

Being a better speaker requires practise, and some form of mastery of the art of rhetoric.  It is not enough to speak often.  Air time is only part of the consideration.  This means understanding the rules of rhetoric, the use of rhetorical devices, and knowledge of the concepts of logos, pathos, ethos and kairos.  This is where a programme such a Toastmasters comes in.  Going into some detail on these elements would be a series of essays. 

As for putting passion into your speeches, it starts with the subject matter.  You must be passionate about it enough for it to matter to you whether people subscribe to your view or are moved by it.  Then, you need to consider the argument and the contentions, and put forth a cogent, coherent speech expounding on the subject matter in a concise manner, which the audience can subscribe to.  For it to have further impact, you need to inject a personal story to demonstrate to the audience that you have a stake in the outcome.  All this takes tremendous practise and mentorship.