A Tale of Two Cities- Response to Structured Deposit Fiasco by Singapore and Hong Kong
Recently, the monetary authorities in both Singapore and Hong Kong made clear what sort of compensation the investors were going to get.
Throughout the investigation process, the Hong Kong people, who inherited a basic British democracy like Singapore, demonstrated on the streets in a peaceful and massive way. This almost constant pressure and public limelight made the issue a festering wound that needed to be resolved quickly and fairly.
In stark contrast, Singapore's strictly enforced no public demonstrations, no public assembly laws meant a comparatively muted response to this issue. Even though the same sort of retirees with large amounts of banks deposits invested in these 'safe' investments lost their entire retirement savings to the fraudulently named 'minibonds', 'high notes'.
What sort of recompense did these investors or rather victims gain?
| Singapore | Hong Kong | |
| Total loss by investors | S$ 508 million | US$ 1.8 billion |
| Total refund pledged by banks | S$ 105 million | US$ 813 million |
| % refunded to investor | 20.6% | 45.17% |
| Average refund by each investor | 32.2% | 70% for over 65 years old 60% for those younger |
| Salary of Prime Minister | S$ 3.04 million a year | S$ 815,670 |
| Salary of Finance Minister | S$ 1.57 million a year | unknown |
| GDP (2008 Figures) | US$ 240 billion | US$ 293.311 billion |
Based on the total refund over total loss figures, the Singapore banks refund a measly 20.6% over the 45.17% by Hong Kong banks which is a figure almost reaching half of the investors total loss. Both countries promised a 100% return for retirees who were uneducated and persuaded into investing into the structured deposit by unscrupulous bank staff hankering after commission.
For further comparison purposes, we show the salaries of the two leaders of government and that of the Singapore financial guru and we can see a huge disparity between the pay of the two city states even though both states managed about the same size of the GDP.
Clearly, a working democracy with clear choices, the ability to congregate and freely express one's view matters in episodes where the state does not or cannot adequately act in their citizen's interests.
Sources:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeh0PsWquE1U
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag1GBqmGhrvg
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayRIru1HUMZM
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2E7KkIR_0vQ
http://www.asiamoney.com/Article/2258721/Opinion-welcome-chance-to-end-mini-bond-madness.html
http://www.marketwatch.com/story/hong-kongs-chief-executive-to-take-54-pay-cut
http://en.wikipedia.org/wiki/Cabinet_of_Singapore
http://en.wikipedia.org/wiki/Economy_of_Hong_Kong
http://en.wikipedia.org/wiki/Economy_of_Singapore
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