Friday, October 11, 2013

$200 million should have been higher now as long as it is the right one

Some may have been shocked at the headline and think I have become cuckoo as they may not even think the $200 million figure is fact, let alone think the figure should be higher.

I would like to state that the Goal article had noted our (Why is he still here) FAS President, Zainudin Noordin statement is $200 million to the Singapore economy, not Singapore football so it does not mean the football industry will benefit from it.

Also the $200 million is Gross Domestic Product (GDP) number so it is not talking about cold hard cash.

A good example to describe both statement above is the rental of stadiums from Singapore Sport Council ($$C) by S-league clubs.

It contributed to the GDP figure as the stadiums, which would have been left unused, are utilised.

However the cost to the S-league are a killer as we see $$C received as much as $1.2 million in cold hard cash in 2011 from the clubs while $$C own contribution is on their books in term of "subsidises".

So we can see why it is a negative for Singapore football, especially S-league, even as it make the GDP number look good for it take cash out of our hands when we need it ourselves.

Indeed the only organisation to benefit is $$C as S-league cash filled their coffers while also enhancing their own GDP contributions to the economy.

However GDP is still important as it can indicate the real spending power of the industry for back in 2007 when the $200 million figure had already been mentioned by then FAS President Ho Peng Kee, we saw how it had enhanced the spending power of the clubs with the salary cap able to shoot up from $64k per month in 2005 to $84K per month in 2008; an increase of 32% in 4 years as the clubs can afford it.

Since then under the current inept FAS president, the salary cap has only gone up a mere $1k in his 4 years in charge; an increase of 1%.

And it is reflected in the GDP contribution which had stagnated at the same level for nearly 5 years.

Based on a dummy guide on inflation affecting spending power, real spending power can only be maintained if we doubled our income, or in this case, GDP, every decade.

So our GDP should now be $300 million; not the $200 million mentioned back in 2007 already.

However as I noted at the headline the GDP increase must be in term of the right one as GDP is a word that is disliked today in Singapore as well as in many nations in East Asia for it has not helped much of the general public even as East Asia share of the world GDP raised in recent time.

Going back to the rental example, Singapore football contribution can raise easily if $$C further increase the rent on their stadiums but it will hurt us.

That is not a GDP raise we need.

With the wrong type of GDP, we may end up like the construction industry where despite being a major contribution to the Singapore GDP at around 5%, it is viewed as a poor industry to work in with low-skilled workers and equally poor salaries plaguing it.

It does not have to be so for in Hong Kong, the construction industry there has high salaries as it is viewed as a skilled industry for the most experienced and highly-skilled are called shifu by their clients and employers (I used the Hong Kong example as in term of region and culture, it is much similar to Singapore and if they can pay their highly-skilled workers well Singapore employers should not think otherwise or we will always be low-skilled)

That is why with the right GDP increase which lead to cash in the hand of clubs, the salary cap can resume on it upward trajectory like back in 2008 when the salary cap was really increased.

Yet by having not grown the industry much, if any, in his 4 years, our inept FAS president has hurt us as his era coincided with an era of high inflation and it has badly eroded the real spending power of S-league and Singapore football.

He should not be proudly mentioning the figure and indeed be questioning why it has stagnated under him.

It should be $300 million now and not $200 million, Mr Zainudin Noordin.