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21st December 2014

Views, Reviews & Forum

How to be a smart city (technology not included)

People's actions matter more in making city a better place to live in

Source: Straits Times / Think

So what's a smart city?

According to one definition, it's one that uses digital technologies to enhance performance and wellbeing, to reduce costs and resource consumption, and to engage more effectively and actively with its citizens.

If that sounds vaguely familiar, you're probably thinking you heard it before, when it was known as the intelligent, and then, the connected city.

It's now morphed into "smart city", because advances in digital and telecommunication technologies have brought the idea closer to reality.

In areas such as transport, energy, education, health care and waste management, the ability to connect people and machines and figure out, using powerful computers, the most efficient way of doing the work is now possible.

Imagine knowing exactly where every bus or taxi is on the roads and matching them to commuters, or monitoring the health of elderly people at home.

But just as having a smartphone doesn't make you a smart person, a digitally smart city isn't necessarily one that's doing all the right things by its citizens and making their lives more pleasant.

In fact, a smart city with all the computers at its disposal can be doing many dumb things, and doing them even more quickly.

A really smart city (as opposed to being just digitally smart), on the other hand, knows what the right things to do are, with or without technology.

So what's a really smart city?

I don't have a definition - it's one of those things where you know it when you see it.

Fortunately, there are many such places in the world, and what they do is worth emulating. Here are my three favourite examples.

Singing garbage trucks

Before Mr Ma Ying-jeou became mayor of Taipei in 1998, garbage collection in the city was like in many other places, including Singapore. People would leave their trash in bins outside their homes and the garbage truck would come every day to collect it.

The problems this created are also familiar - the amount of rubbish kept growing every year, sometimes spilling into the roads from bags left overnight and scavenged by stray cats and rodents.

Mr Ma proposed a radical solution.

Henceforth, all rubbish had to be placed only in bags sold by the authorities, with garbage fees worked into the cost of each bag. That means the more you dispose of, the more you pay.

Even more unprecedented - the bags had to be brought down only when the trucks arrived in the evening and thrown into the vehicles by residents themselves.

Almost everyone was up in arms at his proposal; critics said it would not work and that rubbish would pile up in the city.

In fact, it worked like a charm. The amount of waste collected fell considerably over the years and the arrival of the garbage trucks, to the accompaniment of music, is a nightly ritual now a part of Taipei life.

Contrast this with Singapore, which has made it so convenient for people to simply toss rubbish down Housing Board chutes, often without even bagging it.

It tends to encourage lazy and wasteful behaviour, resulting in ever increasing amounts of household trash that require more land and incinerator plants.

The colour of rubbish

In Germany, most homes come with four bins, all differently coloured according to what they are meant to collect.

Blue is for paper and cardboard, yellow for packaging materials like plastic, cellophane or metal, brown for food waste and black for assorted rubbish that doesn't fit in any of the others. Bottles have to be disposed of in bottle banks, garden waste in specially set-up compost bins.

These and other measures have made Germany the leading European country for recycling household waste.

That's smart, because it leads to more efficient disposal of rubbish, saving valuable land and energy.

In Singapore, there isn't much recycling of household waste, and even food waste isn't separated from other trash. This raises the cost of waste disposal, as food contains moisture which needs more energy to incinerate.

If you've ever visited the Tuas incineration plant and smelled the stench from decaying food mixed with other trash, you'll know what I mean.

Two wheels good, four wheels bad

Almost everyone cycles in the Netherlands, Denmark and many other European countries, not for recreation but to commute to work.

Cities are planned around this; there are special bicycle lanes, and cyclists have right of way over other vehicles.

On a recent trip to Amsterdam, I found that I was the only (not so smart) pedestrian on some roads. Everyone else was on a bike.

But it's too hot to cycle in Singapore?

Where I live, in Serangoon Gardens, there is a French school nearby.

Every morning, scores of its students cycle past my house, often with parents riding behind the younger ones.

You never see this with Singaporean parents or students.

Yet, if you think about it, it's such a smart way to travel - cheaper than driving a car, you get a lot more exercise, and it's so much kinder to the environment.

Who's the smarter one - the Dutch cyclist or the Singaporean with his $100,000 car bought with a five-year loan?

I could give many more examples from other cities, but they all have one thing in common. Really smart solutions involve people doing things that collectively make their city a better place.

It's never the technology, but almost always people's actions and motivations that matter more.

Leadership is important, too, because citizens seldom act spontaneously.

Laws need to be passed to get people to take their garbage down, to keep four coloured bins in their homes and to provide for bicycle lanes in the city.

The important point is that a city needs to be really smart first before it becomes digitally smart.

Otherwise, you end up making it even easier for people to do the dumb things they already do, by providing them the technology to do so.

Singapore is smart in many ways - in how it provides housing for most people, in greening large parts of the city, in capitalising on its location to link up with the rest of the world.

But there are many other areas it can be a lot smarter in.

Most have nothing to do with technology.

-By Han Fook Kwang, Editor At Large

Global Economy & Global Real Estate

Global economy facing 'unusual structural shift'

Experts see shift of power back to the US and voice concern about financial contagion from Russia

Source: Straits Times / News

THE crashing oil price is not just another cyclical downturn but a stark sign that the global economy is facing an unprecedented structural shift, financial experts said.

The profound changes under way will benefit some nations but bring problems to others.

Singapore and the United States are largely expected to be among the winners while the biggest losers will be countries such as Russia and Venezuela that depend heavily on selling oil. 

Net oil exporters such as Malaysia may suffer in the short term, they said at a roundtable discussion held by The Sunday Times last week.


"There are reasons out there to think that this could be more of a structural rather than cyclical story," Bank of America Merrill Lynch economist Chua Hak Bin said.

"The United States is now structurally emerging as a net energy exporter," he noted, adding that new drilling technology has made it cheaper for smaller oil producers to enter the market.

Smaller producers can respond more nimbly to changes in market demand and the industry has become "closer to a perfect market", he said.

The oil bust could not have come just from a decision by the Organisation of Petroleum Exporting Countries (Opec) to maintain its oil output, since Opec controls only a third of global production, he said, adding: "I would question whether oil is the new coal... When you look back at history, when commodity prices have plunged so much, they have not rebounded."

Crude prices have nearly halved over the past six months: Brent crude sank below the US$60 a barrel mark last week before rallying to around US$60.40.

Mr Lennie Lim, regional head for Asia at fund manager Legg Mason Global Asset Management, also pointed to "a very strong structural shift" in the global economy.

"We have a lot of managers based in the United States; we are rather surprised that this message has not reached the rest of the world yet. They see it as a new renaissance in terms of the US having a very strong competitive edge in lower manufacturing costs."

Many firms that outsourced operations were moving manufacturing back into the US, which would create more jobs, boost consumer confidence and stimulate the economy, said Mr Lim.

Mr Howie Lee, investment analyst at Phillip Futures, said this shift of power back to the US would be a game-changer for the global economy and geopolitics as the US would no longer be "at the mercy of another country".

Singapore set to benefit

Singapore is also expected to be a net beneficiary as it is a net oil importer, so falling prices bring immediate savings.

Singapore exports refined petroleum products, which are premium goods compared with the raw materials, Mr Lee noted, adding: "So in the short run we are getting crude oil at a lower price while our premium product prices tend to be stickier, so we are seeing our profit margins widening."

Refiners here will have hedged against oil price crashes, so they "should not see profit margins get squeezed that badly", he said.

However, Dr Chua added that since the amount that people here spend on petrol is much less than car taxes, the net positive effect on consumer spending is likely to be small.

Marine and offshore firms involved in oil production may also be hurt, the experts said.

Mixed bag for neighbours

Most other countries in the region are also widely expected to benefit from the oil price crash since they are also net importers.

The major exception is Singapore's biggest trading partner, Malaysia, which is still a net exporter even though it has gradually been moving towards becoming a net importer of oil. Oil-related revenues account for about 30 per cent of its fiscal intake.

"There will be all these tremors," Dr Chua noted. He said the oil crash could mean that the Malaysian government could fall short of its fiscal targets next year and there are concerns that the country will have to cut back on expenditure, which could lead to bad debts for Malaysian banks.

Mr Lee told The Sunday Times that the other South-east Asian country that will be hit is Brunei, where oil exports make up a huge chunk of state revenue. However, he said the Brunei government ought to have enough reserves to help tide it over.

The experts were more worried about countries heavily dependent on oil exports, such as Russia and Venezuela, and the financial contagion arising from their possible collapse.

Russian contagion

DMG research head Terence Wong said financial contagion arising from Russia is one of the biggest risks to the world economy next year: "I'm most worried about Russia. I'm not sure how far they can last till they start to default on their debts. (Russian President Vladimir) Putin is putting on a brave front."

He said he was hoping that the Opec cartel would decide to shrink output in the middle of next year, which could help prices recover.

While many Singapore companies have exposure to Russia, the knock-on effects from a Russian collapse would generally affect Singapore as it is a small and open economy, the experts said.

Capital Economics said in a report last week that the damage done to net oil producers by the oil bust was expected to be "10 times larger than the boost to net consumers".

"The losers may be hit so hard that the fallout from their problems offsets the more diffuse benefits to the winners, even if the latter group is much larger," it added.

"We still believe the contagion risks to be small, provided oil prices don't fall much further, but will continue to assess the wider implications of the crisis in Russia particularly closely."

-By Melissa Tan