Problems With Convenient Solutions


The chief executive of a private company, Changi Airport Group (CAG), said something recently that may have raised some eyebrows.

Talking about the planned new airport terminal and expansion of Changi Airport, Lee Seow Hiang of CAG said: “We’re confident of the need for T5, but it’s so big, everyone has to chip in. We’re also putting our money where our mouth is, which is why a huge part of our profits and future profits will be ploughed back into the Changi East development.

If we dissect his comments, this seems to be a classic example of a Hegelian dialectic, or the problem-reaction-solution paradigm. For Changi Airport, the perceived problem that is that CAG reckons passenger capacity is not sufficient, and the response is that more capacity is needed to keep up.

Saviour Flies In

The solution to this problem is to get people to pay for the cost of increasing capacity based on CAG’s “confidence” that there is a need for T5. Where is the relevant data that backs up this confidence?

So, in the case of CAG, it provides the problem, reaction and solution all at once, which is quite remarkable for a private company. It sweetens the deal by noting that it is ploughing back its earnings into expanding the airport.

However, is that not what good companies are supposed to do in the first place? Look for growth opportunities to invest in. If it is confident about the need for more passenger capacity, that is normal.

Couching in terms like “everyone has to chip in” is not something that a private company gets to say.

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Business Issues

In the meantime, as a private company running the airport, CAG can charge people for using the airport facilities. Will it lose passengers who don’t want to pay the extra charge? Will it lose some of its competitiveness? Sure it will, but that is the nature of business.

The use of particular airports is becoming less inelastic in the region with international airport options within a two- to three-hour flight of Singapore growing rapidly.

In any case, CAG has a captive audience, namely Singaporeans who will always use Changi Airport because that is typically their only option into and out of the island. This also likely means that Singaporeans will end up paying extra charges if they are implemented.

Another recent example of this problem-reaction-solution paradigm can be found in a comment made by Finance Minister Heng Swee Keat. At the recent Straits Times Global Outlook Forum 2018, he said: “Fifteen years from now, it’s going to be a completely different demographic in Singapore…If we don’t prepare for that I think we will come to regret it and I want to make sure for whatever I can, I will do the responsible thing.”

Preferred Directions

In this case, the problem is that a completely different demographic in Singapore is coming, and the reaction is that if nothing is done, Singaporeans will “regret it”. And the solution is to do the responsible thing, which refers to spending within Singapore’s means.

Heng also said: “As expenditure increases and revenue growth slows, we must think of ways to manage expenditures and raise revenues.”

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This is a classic case of the Hegelian dialectic that is favoured by Singapore authorities.

Create a problem sometime well into the future and get people worried about it and wanting to see a solution. Then the solution that was likely pre-planned is unveiled with bells and whistles.

With the Singapore government, it is always about raising revenues to maneuver the island along a never-ending growth trajectory. And when the government talks about raising revenue, it invariably turns to the pockets of Singapore. That should be clear by now to many people.

So, the next time there is a “crisis “of some sort in Singapore — not including unforeseen natural disasters or terrorist attacks — read between the lines when people in authority make their comments and see if you can identify a framework of problem-reaction-solution.

They are actually quite easy to spot.

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