Sincere Apology

Dear all

Thanks for still visiting this blogsite. I haven't been able to post new thoughts at the moment as there are too much things to do, and so little time (hence the economics concept of 'scarcity' applies here!). Among others, I have to start writing a new chapter for my research, we have to house-pack (we have to move as our landlord is selling the house!), my second daughter is starting her school (loads to prepare: clothes, food, millions of forms to sign and of course constantly praying that she will be fine!) and on top of that I have LOADS of journals to read (I tell you, I wish reading a journal will give you the same pleasure as reading that Shopaholics novel, hehe).

A note to any mommy who is intending to study: DO IT AT YOUR OWN RISK. You really need to have a juggling skill and also means less time to do any eyebrow-plucking (you should see the state of mine!hahaha) and will do lots of hair-pulling (your own, that is). BUT I extremely LOVE it!

OK, enough for today. Will try to squeeze some time later, hopefully writing some comprehensible economics stuff related to Brunei. Till then.

Salaam.

The light at the end of....

Can't help but laugh looking at this phd comic. Exactly what I feel at the moment.

(From phdcomics.com)

10 Reasons to Study Economics

1. Economists are armed and dangerous: "Watch out for our invisible hands."
2. Economists can supply it on demand.
3. You can talk about money without ever having to make any.
4. You get to say "trickle down" with a straight face.
5. Mick Jagger and Arnold Schwarzenegger both studied economics and look how they turned out.
6. When you are in the unemployment line, at least you will know why you are there.
7. If you rearrange the letters in "ECONOMICS", you get "COMIC NOSE".
8. Although ethics teaches that virtue is its own reward, in economics we get taught that reward is its own virtue.
9. When you get drunk, you can tell everyone that you are just researching the law of diminishing marginal utility.
10. When you call 1-900-LUV-ECON and get Kandi Keynes, you will have something to talk about.

(Source: JokEc)

How to reduce crime Part 2.

It is quite disheartening to read today's news in the Brudirect regarding students' involvement in criminal activities. I believe it is not the job of the police alone to reduce and prevent such activities happening (which are alarmingly increasing). And I also do not agree that we should totally rely on the parents of these teenage delinquencies to perform the 'correct' parenting roles as according to the police supt.:
"The majority of cases that involve students are from broken homes and those who are gullible and easily influenced by friends."

My interpretation of 'broken home' here is a family who do not live in an environment where children can grow up healthily (mentally and physically). You see, the most important years of a human's life are the first three. During these years, skills such as communication, empathy, compromise and recognising good and bad are developed, which will help the children to make good (and bad) decisions later in their lives. Children who come from 'broken families' are hardly exposed to such skills. Worse, if any of their parents or family-members are involved in criminal activities, then the likelihood for these children to be involved in the same activities are high.

For this reason, I believe it is now time for Brunei to think outside the box and adopt a more holistic approach involving not only the police, but also education, health and social care. Early years initiatives perhaps can be offered to help support the PARENTS who have criminal records, who are unemployed and teenage parents (which I blogged a few days ago) who I believe have greater risks of not performing the 'correct' parenting roles. Supports such as regular social-care visits, counselling and/or financially should be looked into. I also think that it is imperative for the relevant government agencies (not only the police) to play an ACTIVE role in identifying the 'high risk' parents and their children and to give the proper supports in order to prevent future criminal conducts (made by those children).

Echoing what I said in my previous blog about teenage parents, I believe the first measure to future crime prevention is to provide education to these young parents so that they and their children can have better future. And again please.....do it immediately.

Salaam.

The employer speaks at last!

I am very pleased with the new JPA memo regarding external tea break during office hours. It is about time (and long overdue) that such activity be banned. I guess you don't need to be an economist to understand the benefit it will bring to the public sector. (Well, ironically it may hurt the private sector for a little while i.e. the restaurants being deprived of patrons). Perhaps we may see office food delivery service on the rise.

Another office rule that I believe should be implemented is to to limit the number of hours an office meeting should last. An officer may not be away from his/her office but is still impossible to find as he/she is ALWAYS in a meeting.

Salaam.

How to reduce crime and make poverty history in Brunei?

If someone were to ask me the above question, my answer would be EDUCATION. Specifically, by providing education to ALL.

I am sure that you and I agree that crime and education are related. People who have more education are generally less inclined to commit any crime and/or become really poor. Now, I am not addressing those who commit crime while they are still at school (although they can come later once they realize the mistake they make), rather those who are deprived of formal schooling due to other circumstances, such as teenage pregnancy, teenage marriage and early school-leavers. And what I mean by education (for now) is the chance for everyone to complete their PMBs, O levels and A levels.

It is really really sad that there are many out there who did not even finish their PMBs because of early pregnancy and/or early marriage (generally because of the former). I mean, what can they do with just Secondary 2 qualification? At Secondary 2, they were like 14 or 15 years old. Children. And these children are having children. How can they support their family? Yes, I know some people would say WHY got pregnant in the first place? But I also ask Can you UnDO it? Why dwell on the kids' mistakes? What good will it have? Nevermind that their teenagehood have been wiped out, let's not wipe out their future too.

It is in fact disturbing, as the trend of teenage pregnancy is rising over the years (refer Borneo Bulletin 19 April 2007). And what about those who did not get pregnant (or whose pregnancies were terminated i.e. miscarriages) but nevertheless were married at their teenage lives (I can assure you, it does happen to many).

I know this is a dilemma. By giving these teenage moms and dads free formal education can be interpreted as acceptance of pre-marriage pregnancy. But I also say by NOT giving them the education may negatively affect the lives of MANY future Bruneians. It will be a vicious circle: Teenage pregnancy leads to teenage marriage leads to being poor (no job/means to support the family) leads to crime leads to poor parenting quality leads to poor children upbringing and ON and ON and ON.

I think, whether we like it or not somebody has to address this issue seriously. For a rich and a small country like us, where high quality of human resources are scarce, we should give these teenage moms and dads the chance to finish their high school education either by allowing them to continue their studies in their former schools or a special school (special I mean a school that caters to their circumstances). I know that there are evening classes for the PMB and O levels but if I am not mistaken, the students still have to pay for the exams fees, which to me is a big disincentive. In fact, I believe what Brunei should do is to give some incentives for these teenage parents to complete their education.

No matter how Brunei wants to do it, I strongly believe it will be worthwhile. But I implore, please do something, for the sake of the unborn babies, who are our future generation. They deserve better lives.

Salaam.

ps. When's the next session of the state legislative council? Hope to see issues such as this and unemployment be thrashed out.

China vs the World: What chance have we got then?

Read an article from FT about China making it hard for other developing countries:

"Being a developing country used to be easy. You followed leaders - Japan, Hong Kong, Taiwan, South Korea - up a well-trodden ladder from agriculture through manufacturing to services. Starting with tilling the soil, you moved on to turning out T-shirts, then toys, then tractors, then television sets, and ended up trading Treasuries.
The rise of China has made that less straightforward. Not only is the first rung harder to reach, thanks to the hundreds of millions of rural migrants to Chinese cities still willing to work for low wages stitching garments, but also exports of goods from China's coastal industrial fringe are rapidly becoming more sophisticated, threatening those halfway or more up the ladder. While the shoemakers of Italy and the steelmakers of Pennsylvania may complain loudly about Chinese competition, those with more to worry about are middle-income Asian countries geographically and econ-omically close to the Middle Kingdom."

It makes me wonder, have we got a chance?
Well, according to Dani Rodrik, Yes we do. All we need is an Industrial Policy for the Twenty First Century, if we want to stand a chance in the global competition:

"The right model for industrial policy is not that of an autonamous government applying Pigovian taxes or subsidies, but of strategic collaboration between the private sector and the government with the aim of uncovering where the most significant obstacles to restructuing lie and what type of interventions are most likely to remove them. Correspondingly, the analysis of industrial policy needs to focus not on the policy outcomes (which are unknowable ex ante) but on getting the policy process right."

It's a good paper (Rodrik's). Please read.

Salaam.

Cartoon: Slate magazine

Service with a Smile

This morning we had to fax the ‘mileage claim’ form to the RBA office in Brunei. It was actually my husband’s. We just found out that his airmiles from BWN to LHR, a trip he made in early April, had not been credited to his Royal Skies account. Actually I don’t really understand how this could have happened. When we checked his boarding pass, his Royal Skies numbers were clearly written and they surely must have also been in the RBA computer system. I just wonder, if the staffs handling the Royal Skies mileage award have to do their work manually i.e. checking for each name. Otherwise, I don’t understand how their computer system could possibly miss anyone…hmmm.

Anyway, speaking of our beloved national carrier, I hope they are currently improving their customer services (now with the new CEO). Not only their in cabin service (actually those flight stewards/stewardess are not bad) but also their ground service. You see, I have had quite a few unpleasant incidences with their ground staff (particularly those at the check-in counters). I don’t know for some reason, they look quite stressful and very rarely I get a ‘service with a smile’, be it in Brunei or in my current case, London. My husband always told me to make proper complaints, but then I brushed off the idea. I didn’t want anyone to get into trouble simply because they probably had a PMS or bad-hair day or a quarrel with their other-halves.

Anyway, we economists believe that Economics, to a large extent, is a study of incentives. So I would say the main reason why we don’t often get good customer services from some of the ground RBA staff is mainly because there is very little (monetary) incentive for them to do it (even though I notice that there is a form for customers to fill in to vote who his/her STAR staff or something. Now, has anyone actually filled those up?)

So I guess, it is up to the employer then in this case to give some incentives so that their staff will always give a ‘Service with a Smile’ to everyone and anyone (everytime) because hey! words of mouth can give greater rewards especially when there is competition.

Just to share you our story, many years ago, my husband and I made a trip to Singapore using SIA. On the way, it was raining heavily. When we landed and made our way to the baggage isle, our names were held up on a card. Then a lady, a SIA staff approached us (sorry lady, I don't remember your name). She explained that because it was raining and wet, our baggage could be damaged. Then somebody actually extracted our luggage for us! Then this lady gave us a phone number to call in case any of our stuff in the luggage was affected. When we checked, there was no damage, not even the exterior of our luggage! Now, THAT’s what I called ‘first class’ service! Oh, and we flew economy. And honestly, after what happened, we actually loved and flew many times with SIA.

Anyway, I hope one day I would be able to share you a similar ‘first class’ service from RBA….Who knows, we may probably experience it this coming July, from the London and/or Dubai ground staff hehehe…

Salaam.

Brunei-Singapore currency interchangeability: What have we got to lose?

It will be the 40th anniversary of the currency interchangeability. Now I know there are different views out there. Unfortunately, we don't have many evidence (in terms of research) to either strongly support or contest the agreement.

OK, let me try to enumerate the pros and cons of the current arrangement:

PROS:
1. Stable currency: Speculators would think twice to attack the currency as they have to contend with the combined reserves of 2 countries.
2. Minimal transaction cost between the 2 countries: Arguably this should lead to positive effect on the bilateral trade and investment (however, see CONS no.3)
3. The 'dutch disease' effect of 'oil' on Brunei economy is eliminated: The 'dutch disease' effect is working through the exchange rate where the inflow of oil money results in currency appreciation. Now, because Brunei does not manage the exchange rate (see CONS no. 1) then there is no 'dutch disease' effect.
4. Price stability (low inflation): Credit to Singapore, as they have been doing a very good job in maintaining low inflation.

CONS (for Brunei):
1. Loss of monetary power i.e. we can't use exchange rate as a policy instrument.
2. Some argued that because of 1, Brunei is not able to depreciate its currency in order to achieve price competitiveness. And this has a negative effect on the diversification effort. [But I say, what about the supply-side?i.e. would this ensure that there will be an increase domestic output for exports?]
3. Because of the differences in the structure of the 2 economies, (i.e. Singapore is a more advanced with a higher productivity economy) the minimal transaction cost resulted in making Singapore as the more attractive destination for investment flow from brunei (and not the other way around).

I guess an interesting research question is now: How big is then the benefit to Brunei?

Anyway if you're asking my opinion, I would say let's just maintain the union. But I also think that it's time that there are some Bruneians who are also involved in managing the currency. (Perhaps some Brunei representatives or seconded officers in MAS for hands-on experience, if we are not already doing that).

Oh well, this is just what I thought.

Salaam.

Ps. If anyone is interested, there is a paper by Chan and Ngiam (1992) in The Singapore Economic Review that talks about the currency interchangeability.

MBA vs PhD

For those of you who are contemplating to do a PhD in economics, think twice! This is what Grew Mankiw wrote in his blog regarding MBA vs PhD:

I believe that from a purely financial standpoint, an MBA is a better
investment than a PhD. An MBA is only a two-year program, whereas a PhD is
typically four to six years. The extra time for a PhD probably not yield the
extra income needed to make it a good investment of your time. A typical Harvard MBA gets a starting
salary a bit over $100K; the typical econ
PhD does not start much higher than that.

But the issue is not entirely pecuniary. The question you should be asking
yourself is what kind of job you want to have when you conclude your education.
A PhD makes sense if you want to consider the possibility of being an academic.
You may pursue a PhD and then decide along the way to pursue a different path
than being a professor. That is okay: Many PhD students leave for the private
sector when they are done with their degrees, and they get very good jobs there.
But if you are sure from the beginning that you want some kind of private-sector
job, then the MBA is probably the better route.

Ooppss! What have I got myself into?
But they also say "PhDs rule, MBAs manage" hehehe.

Salaam.

Ps. No matter what, I hope I'll get out of here, alive!