Tharman at the IMF meeting

I read this almost 24 hours ago and I am glad I didn't blog about this until know because I want to pair it with the funk Finland has gotten itself into. Tharman as quoted in this article by Jeremy Au Yong was particularly pertinent to avoiding Finland's situation.

From Tharman,

At a press briefing earlier, Mr Tharman warned that a prolonged period of mediocre growth would leave the global economy more susceptible to shocks.

"If we have low growth persisting over a long period, we will always be vulnerable. Vulnerable to geopolitical risks because they will have that much more impact on growth, jobs, on confidence. We'd be vulnerable to biological pandemics and we would be vulnerable to financial Ebolas which are bound to happen," he said.

Speaking at the briefing after chairing the 30th meeting of the International Monetary and Financial Committee, he said the body's main concern was how to address long-term problems.

"The substance and spirit of our discussions were very much on focusing on tomorrow. In other words, focusing on the reforms needed to address the challenges of tomorrow," he said.

"And if we don't do that, then we can't solve the problems of today. To solve today's growth problems, we have to lift potential growth. That means reforms that don't pay off immediately but reforms that build confidence over the medium to longer term... If we don't address tomorrow's growth problems today, we would be left with today's problems tomorrow."

While Singapore is growing at potential, he said at the interview the long-term challenge remains centred on the problem of raising productivity.

"We have to find every way of getting productivity growth. We are still in a situation now where we've got new people coming into the workforce every year but, come 2020, it's going to be like some of the mature economies where you grow only by productivity."

World leaders are not known for long term thinking if short term solutions are available. It is a temptation which our government has often discovered to be irresistible. Upping productivity which we are doing now is very painful work. It is simply not given the effort it demand until the leaders are at risk of losing elections.

We were so angry with the government that for a while we put aside the dictum, "grow or perish". We need to return to normal sometimes and respect fast growth again but not at the expense of digging into and weakening our bones. Sometimes we have to sacrifice some muscles which Nokia failed to do. All the time we are trimming fat which is by the natural laws is always growing somewhere.

By 2020, we will only grow by productivity will be proven false as we near 2020. We need to remake our advantages and most important we need good foresight, which is better than history in helping us see the present clearly.