Monday, October 20, 2008

Rich Minister or Poor Minister?

Well running through my updated blog list, I came upon another post regarding Singapore's highly paid civil servants. Its a topic that will never go out of fashion. Singapre's civil servants has been well paid for as long as I know and people still cannot get over the fact. Their salary scale was devised so that they will not be corrupt. Ministers in China get RMB1050/mth. That is around S$200/mth. Can you blame them for being corrupt? So much power yet so little money... hmm...

A good salary will not guarantee performance. Neither will it guarantee zero corruption. What it will do is it will reduce the temptation to take bribes. At risk is a well-paying job with great perks. Some top corporations change their head every now and then, and that makes you wonder, why is there a need if they pay good money? If they pay good money then the person must be capable, no?

Salary scale and the ability of the HR/recruitment policies are very different things. The salary scale is fixed but the body of the organization can be really messed up if the HR doing the recruitment is a real piece of sh*t.

A few questions. Do you want our ministers to be paid the same as those from China? If not then what will be the correct salary scale? Will your proposed salary scale ensure that they will not be corrupt? If you have the power to appoint anyone into the Cabinet, can you guarantee that they will be the best and most deserving person and will never cock up any show? If you are the PM, can you make Singapoeans give birth to more babies? Can you make Singaporeans sweep the roads so that we don't need so many foreign talents? Could you predict the problems caused by the Lehman bonds?

One final question. If you know that they are going to be so well-paid, then why didn't you study hard, earn a scholarship fully paid for by SinGov and aspire to be the next Prime Minister?

As for the Lehman minibonds, alot of investors are complaining about being misleading information and want the government to do something about it. Do about what? Was there a guarantee on returns/principal invested? If there was a guarantee why didn't the banks/CPF board just put all our savings into Lehman bonds? Investments with high returns usually brings with them high risk. Many of those surveyed quoted that they were misled into think that Lehman products were low risk. Low risk investment does not equal to no risks. If the national bank of Iceland had an investment product, would you have deem it to be a low risk or high risk product? Even banks have a risk of going bust.

I'm sure no one complained when they were making money. If the bankers gave guarantees for 100% of the investment, when in fact there weren't, then sue the bank. I pity the old and illiterate. They were victims but were they victims of a deliberate plan to cheat their money or a nutcase global economy?

A few lessons learnt from this episode:
1) Put money in banks of countries where they have a guarantee on your deposits. HK and Singapore will guarantee all deposits until 2010 so I'm safe.
2) Unless it was written in black and white that returns will be guaranteed, assume that any investments may be gone with the wind. Oh, I don't even trust guaranteed figures because the financial institution is so messed up these days.
3) Place money in many places like properties, fixed deposits, trust funds and different banks. I always believed in properties. Even if there's a collapse (like a real building collapse and not in the economic sense), the insurance should cover me. The insurance do cover that, right? Well I probably won't see the money if I'm in the building... But hey what are the chances of that happening?
4) There's no free meal in this world.

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