Wednesday, 3 April 2013

Dynamic PAP or No Competitive Life Cycle?


There is hardly any Competitive Life Cycle in Singapore politics. There is no shakeout or disruption in the parliament election and so is there a need for the PAP to be dynamic? As a result, its dynamism is mainly focused on management of changes (changes in preventing entry, high cost for political participation, game rules to its advantages, press freedom).

The capability analysis of the PAP clearly shows that its design and innovation capability is weak and does not add value to the value chain.  Competitive dynamic in fact is referring to innovation-led economic profits.  Dynamism can add temporary advantages to an organization and help to maintain (or even enlarged) the enjoyed economic profits.  The PAP does not have a dynamic advantage but a monopoly-led and -managed dynamism.  However, it still enjoys economic profits. Why? 

There is also no Competitive Life Cycle in the election market as the PAP has an unbroken absolute majority in the parliament for more than 50 years. Why?      

Competitive life cycle

In Singapore politics, there is no CLC in the ‘election’ industry.  The three phases of Emergent (Annealing) – Growth (shakeout) – Mature (disruption) have not happened in Singapore parliament election. The “election’ market remains a single brand industry without strong alternative and competitor. 

There is no shakeout and also no disruption.  Shakeout and disruption only happen to the opposition parties. For example, Barisan Sosialis http://en.wikipedia.org/wiki/Barisan_Sosialis, Singapore Democratic Party http://en.wikipedia.org/wiki/Singapore_Democratic_Party, and Singapore Democratic Alliance. http://en.wikipedia.org/wiki/Singapore_Democratic_Alliance.
 
The PAP is the only party enjoying economic profits, cumulative revenues and huge margins in modern-day Singapore politics.  

Competitive Life Cycle Analysis

Phase
Timing
Severity
Disruption
How long is the mature phase?
Radical or incremental?
Annealling
How long is the emergent phase?
Dominant design or multiple designs
Shakeout
How long is the growth phase?
Winner takes all, duopoly or contested?
Overall
Slowly evolving   or hyper-dynamic
First mover advantage?

The PAP was established in 1954. From 1954 to 1959, there were intense competitions in the market.  However, in 1959, the PAP was elected to run Singapore. In 1961, there was a split in the PAP.  Even that the PAP managed to win the election with reduced majority and in 1966 when the oppositions walked out of the parliament, there was zero opposition in Singapore parliament. http://en.wikipedia.org/wiki/Barisan_Sosialis


Table 1: No Competitive Life Cycle in Singapore politics? 

General Election
year
% of votes
Total parliament seats
Seats won by the PAP
% of PAP seats in parliament
2011
60.14%
87
81
93.1%
2006
66.6%
84
82
97.6%
2001
75.3%
84
82
97.6%
1997
65%
83
81
97.6%
1991
61%
81
77
95.1%
1988
63.2%
81
80
98.8%
1984
64.8%
79
77
97.5%
1980
77.7%
75
75
100%
1976
74.1%
69
69
100%
1972
70.4%
65
65
100%
1968
86.7%
58
58
100%
1963
46.9%
51
37
72.5%
1959
54.1%
51
43
84.3%
Source: Singapore-elections.com

Perhaps, the one CLC faced by the PAP is in the early years (1950s and 1960s) and after that the PAP has full or absolute control of Singapore politics in the past 54 years (since 1959).  Using the CLC analysis, we can conclude that
-       Mature phase is long and dynamic change is incremental (controllable and manageable).
-       Emergent phase is short and very quickly a dominant brand (PAP) becomes the monopoly in the market (with no alternative).
-       Growth phase is short too and with just one general election in 1959, a situation of ‘winner takes all’ occurs.

Hence, the overall development for this unique political market is once the market leader is established, the ‘first mover advantage’ quickly moves in and the PAP becomes the only master (sole monopoly) in Singapore politics. After they have consolidated their political positions, the market dynamism slows down. As a result, the market becomes a slow evolving environment.  

As the mature phase is so long, there are some problems and issues the incumbent will have to face:
-       No better position or no change in position at all even the market environment changes (e.g. new technology, social media, young voters)
-       Complacency problems: bad news about PAP members or associates, drop in efficiency etc. 
-       Degrading party culture, values, and cohesiveness.

How long can the PAP hold their monopoly position and stop the CLC from moving or evolving again?

Since the PAP has absolute control (>90%) in the parliament, any moving or evolving of the CLC will be a disadvantage to the PAP.  Jasmine revolution, political tsunami or political changes (ISA –detention without trial) are not the friendly words in the PAP dictionary.   

As discussed in the capability analysis, the PAP is weak in Design and Innovation (the 2 factors can add value and create temporary advantages for making economic profits). So, they cannot depend on these 2 factors to stop the moving of the cycle. Hence, it is quite obviously that the PAP can only rely on one factor, monopoly which is the only source that can contribute to the PAP’s economic profits. But it is getting more and more difficult to stop oppositions to enter the market. The past obstacles of political entry have become obsoleted and sometimes become the PAP liabilities for a free and true democracy development in Singapore.  

If the PAP cannot protect its monopoly position, e.g. preventing others to join in, their market share and economic profits will have to be reduced.  The question is by how much.

New Economic Profits

The next general election in Singapore will be due in 2016 or 2017. To remain absolute control of the parliament, the PAP will need to have two-third majority in the parliament. The parliament currently has 87 members with full voting rights.

Table 2: Possible PAP majority and seats in the parliament

PAP Majority
Total seats
PAP MPs
PAP MPs %
Oppositions MPs
2011
87
81
93%
6
Two-third 
87
58
66.7%
29
70%
87
61
70%
26
75%
87
66
75%
21
80%
87
70
80%
17
85%
87
74
85%
13
# assuming there are no change in total seats

The PAP only obtained 60% votes in the last general election in 2011.  By proportional standard, the PAP is enjoying economic profits (more parliament seats than votes obtained). Even the PAP is allocated two-third parliament seats, it is still a bonus to them (60% votes with 67% seats). The fact is the PAP is having huge margin and economic profits, a lot more than the two-third seats (58 against 81).  From the PAP viewpoint, the economic profits at two-third majority level are too low and uncomfortable especially compared to the past. Quite likely, they are aiming to have more than 80% or 85% majority (70-74 seats). However, from the point of view of the oppositions, they, of course, hope to reduce the PAP’s majority to below two-third.   

Let consider the timing and severity.  Will there be a competitive re-ordering occurring, a new dominant design (brand, technology) appearing and the old firm disappearing?  This is very unlikely. Or, we call it a freak election that will bring a new political party or a coalition in power. There is a remote possibility that it will happen.

In the past, the PAP can hold the position for a long period and even prolong the evolving process, why can’t they continue to do so and enjoy economic profits like before?

The PAP of course wants to maintain the economic profits as high as 2011, i.e. 93%. But the oppositions wants to reduce the majority to two-third, i.e. 67%.  So, the new (political normal) economic profits of the PAP will be 80%, if we take the mid-point.  Let further discuss this possibility in Generic Competitive Position. 

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