Audit Analytics by Sean Elrington

Data analytics is useful for good governance as it provides better assurance as compared to manual sampling. Is the need to hire consultants necessary for straight-forward audit tests? It can help recover unnecessary spending. There may be resistance from the other departments if audit wants to perform 100% checks. There are still auditors which do not use data analytics.

Common Objections to Using Audit Analytics. Some auditors are too busy to learn and to change. The data may not be readily available. In addition, the cost has to be justified. Some are too intimidated by change. You need an understanding of ERP, database structures, views, tables etc. The benefit is that you might save time for data analysis. How will analytics help audit productivity? As it requires less man-hours, analytics can be useful. Although in the short-run, probably more work will be required. If the error is systematic, testing 100% of the population might not be very useful. In such cases, it will be better just to test a few samples and fix the control first. Analytics is here to stay.

Questions that the IT manager will ask you. Why can’t the auditors use Excel? Excel has its limitations on data size. Random sampling is not a good way to detect fraud. Data can be amended easily in excel and it does not have much data security. Sorting can be slow and Excel lacks functions like Benford’s Analysis. Modern audit software have data logs too. It is good to host the data on a server especially when there are multiple users. If you rely on the IT department to generate data for you, there is a risk that the data could be manipulated before being provided to you. There is an issue of how much access that an audit should be given. Data should be obtained from production and not the data warehouse. In the data warehouse, bad data might have been removed already. Application controls rely on passwords and roles to work. Relying on the controls in the ERP system might not be useful when there is collusion. Data might be present from different systems and auditors can’t simply draw the data from one ERP system.

Considerations when choosing audit software. Some of the functions that are heavily used are extract, join, relate, summarize, stratify, classify and age. Continuous monitoring is a lot more expensive and complicated. Is training a big consideration? Do you need to write your own scripts? Or can you buy scripts? What is your required return on investment? Will learning the software help the auditors in their career development? How much technical support is needed? What are the server requirements?

Analytic Software Tools. Picalo is a free tool that can be downloaded online. Some of the other software besides Excel are TopCATTs, Arbutus Software, IDEA, Monarch, Picalo, ACL. ACL usually requires a lot of training before users will know how to use.

Testing for Duplicate Payments. One can test both exact and fuzzy matches. There are multiple reasons why this might occur. First, you have to ensure that there are no duplicate vendors by scrutinizing the vendor’s details. For exact match testing, you can use ‘Substring’; ‘Include’; ‘Exclude’; ‘Alltrim’ formulae to remove dashes, hyphens etc. Testing should be performed on fields like Invoice Number, Vendor Number, PO Number, Date, Amount etc. Deconstruction techniques are used for Fuzzy matches. They use techniques like Soundex, Soundslike, HEX etc. Some of the algorithms are Levenshtein distance, Metaphone etc.

P2P Vendor Analytics. Some of the objectives are 1) vendor master file is correct; 2) employees are not vendors; 3) no duplicate or unused vendors. Match vendor information with employee information. Check out vendor addresses to ensure that they are not mail drop addresses used by delivery services. Sort the number of vendors by payments per year. Use a vendor name fuzzy match. Find vendors with missing fields to check whether the vendor master is well-kept or not.

Purchase Card Analytics. Objectives are 1) only authorized employees are using cards; 2) card purchases are acceptable. Try and detect transactions by authorized card-holders. Find cardholders not in employee master file. List top spenders by department. Find transactions in excess of authorization limits. Identify weekend and holiday purchases.

FCPA analytics. Objectives are 1) test that there are no suspicious payments made to individuals or entities; 2) verify that gifts received are permitted. Identify payments made to high risk countries. Identify cash payments. Identify unusual gifts. Identify credit card spending with unusual Merchant Category Codes. Find unusual vendors, like PEPs etc. Flag out payments with the words ‘facilitate’. Match to watch-lists, world-check etc.

P2P Payment Analytics. Objectives: 1) POs are unique and properly filled; 2) SODs are working; 3) controls to match invoice and PO amounts are accurate. Detect split purchases. Find duplicate payments. Find POs that were raised late. Look out for people who can create and approve their own POs. Look out for unauthorized purchasers. Ensure that there is approval for all POs. Compare a list of payments to prohibited vendor lists.

GL Analytics. Objectives: 1) Only authorized employees are making GL entries; 2) GL entries are acceptable. Detect duplicate GL entries. Look for suspicious wordings like ‘park’; ‘temp’; ‘reverse’; ‘suspense’. Detect GLs made at odd timings. Detect payment voucher and look out for approvals etc. Look out for frequently changed or reversed accounts. Find temporary accounts.

Healthcare Analytics. Objectives: 1) procedures billed to the correct code; 2) appropriate charges are billed to correct account; 3) reasonable timeline of patient activities.

Fraud Facts. Whistle-blower hotlines are a great way to detect fraud. Some level of fraud might be acceptable. It depends on the organizational culture. It is not the auditor’s responsibility to detect fraud. Look out for transactions with fraud symptoms. In general, there are two types of fraud: 1) Fraudulent financial reporting and 2) misappropriation of assets. It is hard to distinguish whether it was an honest mistake or fraudulent. The top from the top must be correct.

Common Business Frauds. You might need the help of a skilful financial auditor to deconstruct fraudulent financial reporting. Financial fraud is a very serious matter. Misappropriation of assets often involve kickbacks. Multiple payees could be an issue. Duplicate payments are a potential source of fraud too. A shell company could be used to deliver fictitious services. Detect maintenance which has been performed too frequently. Physical inspection of works/goods can help. Look out for defective delivery of goods/services by having good IC over the receipting of goods and services. See how often different employees reject or accept goods based on their quality. Inaccurate pricing is one of the type of risks too. Contract rigging means awarding to the lowest bid, but later subsequently changing the product specs so that the contractor will have to deliver more and thus can earn more money. Check contracted projects over their original budgets. Contract rigging is difficult to detect if you are not familiar with the goods. Bid rigging is very difficult to detect. Ensure that there are no phantom employees or contractors. Look out for invalid employees’ wages.

Interesting Fraud Stories. The fraud triangle occurs when there is 1) opportunity; 2) motivation; 3) rationalization. Don’t let non-trained employees do the accounts. Do not let the salespeople collect the cash. Be wary of bribery to win contracts etc.

Lee Kuan Yew – The Grand Master’s Insights on China, the United States, and the World by Graham Allison and Robert D. Blackwill (Part 2)

For Part 1, click here.

The Future of National Economic Growth. LKY is very open to talent as he believes it is an American concept. ‘We accept that whoever joins us is part of us.’ Singapore is not corrupt, with good infrastructure and language ability of the English language. Make haste slowly. The gradual introduction of English was a hallmark of Singapore’s success. He allowed parents to choose English or Chinese. It is very important to have the rule of law and not abide by Socialism. The workforce matters a lot, as it determines national competitiveness. Three attributes are vital: they are entrepreneurship, innovation and management. The rule of law is crucial to facilitate trade between many countries. Singapore’s talent pool is too small. Good values are also important. There is this fear that people will hate you if you do their job well. This negative mindset has to be eradicated. Singapore has learnt the value of industrialism from the West and Japan. A modern worker should be enterprising and innovative.

You can keep your name, Brzezinski, Berlusconi, whatever it is, you have come, join me, you are American. We need talent, we accept them. That must be our defining attribute. – Lee Kuan Yew

A people’s standard of living depends on a number of basic factors: 1) the resources it has in relation to its population; 2) Level of technology and industrial development; 3) educational and training standards; 4) culture, discipline and drive in the workforce. – Lee Kuan Yew

Those with good minds to be scholars should also become inventors, innovators, venture capitalists, and entrepreneurs; they must bring new products and services to the market to enrich the lives of people everywhere. – Lee Kuan Yew

Societies that will succeed are those which easily assimilate foreigners. Silicon Valley is such a place. Not only is it ‘color blind’ and uniquely meritocratic, it has a culture that draws newcomers in. – Lee Kuan Yew

We must continue to attract as many able and talented people from China, India, the region, and from developed countries, to add to our team. Without this input of foreign talent, even the U.S. could not have been so successful. – Lee Kuan Yew

Singaporeans must take to heart one simple fact: unless we improve ourselves through education and training and through developing the will to be productive, our future cannot be assured. – Lee Kuan Yew

There is a dearth of entrepreneurial talent in Singapore… We have to start experimenting. The easy things – just getting a blank mind to take in knowledge and become trainable – we have done. Now comes the difficult part. To get literate and numerate minds to be more innovative, to be more productive, is not easy. It requires a mindset change, a different set of values. – Lee Kuan Yew

Workers now have to manage their own control systems, supervise themselves, and take upon themselves the responsibility to upgrade. They must be disciplined enough to think on their own and to seek to excel without someone breathing down their neck…They must be enterprising and innovative, always seeking new ways of doing the job, to create the extra value, the extra edge. – Lee Kuan Yew

The Future of Geopolitics and Globalization. Some of the problems of the Eurozone are the financial crisis and rising debt of some of the nations. North Korea is another problem. Kim Hong-un. Japan’s economic stagnation is also a problem. Iran’s nuclear program. The major nations need to stop them from acquiring nuclear weapons. Russia is declining as they are able to generate wealth apart from exporting natural resources. More Chinese from China are also moving there. Russians have a pessimistic view of the world. BRIC will not combine to form a global force. ASEAN countries need to combine their markets to fight China. However, ASEAN countries are pegged back with low growth and problems of the past. The financial crisis was due to the lack of regulation of derivatives. Global warming and climate change are a big threat to globalization. Even with medical advances in technology, global warming cannot be eradicated. Information transfer is now very fast with the advent of the Internet. LKY believes it is much harder to groom national champions by incubating them due to globalization. Technology has changed the world. Upgrading skills, level of education. ‘Lifelong learning is a must for everyone in this knowledge economy, with rapidly changing technology.’ The early Singapore brought in many MNCs. History has shown that countries with the largest number of start-ups win in the end. There is no viable alternative to global integration.

But when your life is so harsh, and from time to time it gets better when the oil price goes up, but that is momentary, you have a different view of the future. – Lee Kuan Yew

The business of a person in a financial institution is to make the biggest profit for himself, so just condemning the bankers and the profit takers does not make sense. You have allowed these rules, and they work within these rules. – Lee Kuan Yew

Recession must come from time to time. It is in the nature of the free market of the western world…People and systems tend to be carried away by exuberance. Investors get greedy and rush in to buy, believing that prices will only go up. Despair and depression then set in. – Lee Kuan Yew

A negative result of globalization is the widening of the inequality between the highly educated and the less educated, between urban and rural incomes, and between coastal and inland provinces. The highly educated can move between countries seeking the high rewards in the developed countries, especially in sectors like IT and the Internet. The less educated are not mobile and cannot get into the developed countries, where wages are higher. This is unavoidable in a world driven by market forces. – Lee Kuan Yew

There has to be a fundamental change in cultural attitudes before Japanese and other East Asians can compete with the Americans who, because of their different history, easily absorbs people of different cultures and religions into their corporate teams. – Lee Kuan Yew

There will not be any global leader who will say this ‘We are going to forgo growth. We are going to consume less. Travel less. Live a more Spartan life, and we will save the Earth. – Lee Kuan Yew

Democracy. Efficient and an effective government must provide the framework for the people to succeed. Reward people based on their contribution to society. Job creation and wealth generations are key drivers. They must also listen to the ground’s views and act on them. Leaders must know how to chart the course. Formulate solutions for the greater and common good. You either have it in you, or you don’t. LKY believes in doing what is right, not always doing the most popular thing for its people. Indonesia, Burma are examples where democracy has not worked. A democratic society must allow for choice and there must be an interested and vilgante electorate. Everyone must take a stand. The people must have disciplined to agree with the objectives of the government. Government must maximize opportunities. Is 1 person, 1 vote the best system? We adopted this from the British. LKY wanted a system where someone above 40 will be granted 2 votes, but those below 40 and above 65 will have 1 vote. Order and justice between person and person, and between person and the state is the key. You need give people the incentive to strive better. This is why the communist society collapsed.

The business of a government is to…make firm decisions so that there can be certainty and stability in the affairs of the people. The art of government is utilizing to the maximum the limited resources at the country’s disposal. – Lee Kuan Yew

Your job as a leader is to inspire and to galvanize, not to share your distraught thoughts. You make your people dispirited if you do so. – Lee Kuan Yew

A national is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people, and the quality of their leaders which ensures it an honorable place in history. – Lee Kuan Yew

I have never been over-concerned or obsessed with opinion or popularity polls. I think a leader who is, is a weak leader. If you are concerned with whether your rating will go up or down, then you are not a leader. You are just catching the wind…you will go where the wind is blowing. – Lee Kuan Yew

One person, one vote is a most difficult form of government. From time to time, the results can be erratic. People are sometimes fickle. They get bored with stable, steady improvements in life, and in a reckless moment, they vote for a change for change’s sake. – Lee Kuan Yew

The rule of law talks of habeas corpus, freedom, the right of association and expression, of assembly, of peaceful demonstration. – Lee Kuan Yew

To be successful, society must maintain a balance between nurturing excellence and encouraging the average to improve. There must be both cooperation and competition between people in the same society. – Lee Kuan Yew

There is a continual need to balance between a successful, competitive society, and a cohesive, compassionate one. That requires judgment, to strike a bargain or social contract.  Each society must arrive at that optimum point for itself. Between the two ends, the highly competitive and the excessively equal, lies a golden mean. This point will move with time and changing values. – Lee Kuan Yew

How Lee Kuan Yew Thinks. Human beings are naturally vicious. Human beings are naturally very competitive and want to achieve more than the person beside them. After many generations have scattered across the whole, there are many genetic differences. LKY wants to give people equal opportunities to succeed. He experienced WWII and the Japanese occupation. That changed him. He saw how humans behave. He learned from both the British and the Japanese. LKY believes in adopting theories to suit reality. History does not repeat itself in the same way each time, but certain trends and consequences are constants. If you do not know history, you think short term. If you know history, you think medium Have the convictions to stick up and stand up for what you believe in. Humans cannot be overly challenged. He does not believe in the welfare system adopted by UK. America has a strong entrepreneurial culture, where people are not afraid of failure. His admired leaders are De Gaulle, Deng Xiaoping and Winston Churchill. Goh Keng Swee was also a very driven man who aided LKY on many decisions over the years.

I have always thought that humanity was animal-like, while Confucian theory says that it can be improved. I am not sure it can be, but it can be trained, it can be disciplined…You can make a left-hander write with his or her right hand, but you cannot really change his or her natural-born instinct. – Lee Kuan Yew

One of the facts of life is that no two things are ever equal, either in smallness or in bigness. Living things are never equal. Even in the case of identical twins, one comes out before the other and takes precedence over the other. So it is with human beings, so it is with tribes, and so it is with nations. – Lee Kuan Yew

In any given society, of the 1000 babies born, there are so many percent near-geniuses, so many percent average, so many percent morons. It is the near-geniuses and the above-average who ultimately decide the shape of things to come. We want an equal society. We want to give everybody equal opportunities. But, in the back of our minds, we never deceive ourselves that two human beings are ever equal in their stamina, in their drive, in their dedication, in their innate ability. – Lee Kuan Yew

The underlying philosophy is that for a society to work well, you must have the interests of the mass of the people, that society takes priority over the interests of the individual. This is the primary difference with the American principle, the primary rights of the individual. – Lee Kuan Yew

You must not overlook the importance of discussions with knowledgeable people. I would say that is much more productive than absorbing or running through masses of documents. Because in a short exchange, you can abstract from somebody who has immense knowledge and experience the essence of what he had gained. – Lee Kuan Yew

I may not have changed in my physical, mental and emotional make-up, the hardware side. But the software side, my responses to God, glory, or gold, has been conditioned by my experiences. In other words, however capacious the hardware (nature), without the software (nurture), not much can be made of the hardware. – Lee Kuan Yew

I do not believe that because a theory sounds good, looks logical on paper, or is presented logically, therefore that is the way it will work out. The final test is life. What happens in real life, what happens with people working in a society. – Lee Kuan Yew

The personal experience of a person determines whether he likes or hates certain things, welcomes them or fears them when they recur. So it is with nations: it is the collective memory of a people, the composite learning from past events which led to successes or disasters that makes a people welcome or fear new events, because they recognize parts in new events which have similarities with past experience. – Lee Kuan Yew

There are three basic essentials for successful transformation of any society. First, a determined leadership…two, an administration which is efficient; and three, social discipline. – Lee Kuan Yew

If you treat human beings just like animals, you just feed them, keep them sleek, well-exercised, healthy like dogs or cats, I do not think that it will work. Nations have gone through tremendous privations and hardships in order to achieve specific goals which have inspired and fired their imagination. – Lee Kuan Yew

You must want. That is the crucial thing. Before you have, you must want to have. And to want to have means to be able, first, to perceive what it is you want; secondly, how to discipline and organize yourself in order to possess the things you want; and thirdly, the grit and the stamina.- Lee Kuan Yew

Revolutionary situations throw up great leaders who demand blood, sweat and tears; comfortable circumstances produce leaders who promise people an even easier life. – Lee Kuan Yew

From my empirical observation of people and leaders, I believe 70-80% of a person’s capability, proclivities, temperament is genetic. The day you are conceived, at least 70% has already been fixed in the womb. If you are bound to be a capable person, you will grow into a capable person. If you are bound to be slow, you will be slow. – Lee Kuan Yew

I think you are a born leader or you are not a leader. You can teach a person to be a manager, but not a leader. They must have the extra drive, intellectual verve, an extra tenacity, and the will to overcome. – Lee Kuan Yew

I do not want to be remembered as a statesman. First of all, I do not classify myself as a statesman. I put myself down as determined, consistent and persistent. I set out to do something. I keep chasing it until it succeeds. That is all. – Lee Kuan Yew

I do not think I can decide how I will be remembered. I live my life in accordance to what I think is worth doing. I never wanted to be in politics. I wanted to be a lawyer and make a good living, to be a good advocate, but I was thrown into it as a result of all these political earthquakes that took place. – Lee Kuan Yew

I am not saying that everything I did was right, but everything I did was for an honorable purpose. I had to do some nasty things, locking fellows up without trial. Close the coffin, then decide. Then you assess me. I may still do something foolish before the lid is closed on me. – Lee Kuan Yew

Lee Kuan Yew – The Grand Master’s Insights on China, the United States, and the World by Graham Allison and Robert D. Blackwill (Part 1)

I have had the privilege of meeting many world leaders over the past half century; none, however, has taught me more than Lee Kuan Yew, Singapore’s first premier and its guiding spirit ever since. – Henry Kissinger

He has sound judgment and intelligence. Without his vision, Singapore might not become so economically powerful. Per capita income rose from $400 a year to about $50,000 now. Singapore is now a major hub and a force to be reckoned with. He has shared his profound knowledge and experiences with many politicians across the World.

When Lee Kuan Talks, Who Listens? (Selected quotes), Xi Jinping, Barack Obama, Bill Clinton, George W. Bush, Jacques Chirac, F. W. de Klerk, Xi Jinping, Tony Blair, John Major, Margaret Thatcher, Helmut Schmidt, Rupert Murdoch, John Chambers, Sam Palmisano, Rex Tillerson, Robert Zoellick, James Wolfensohn, Muhtar Kent, David Rothkopf, Hillary Clinton, George Shultz, Madeleine Albright, Zbigniew Brzezinski, Larry Summers, Robert Rubin, Joseph Nye, Nicholas Kristof, David Ignatius, Fareed Zakaria

In my long life in public service, I have encountered many bright, able people. None is more impressive than Lee Kuan Yew. – George W. Bush

Hallmarks of Singapore’s success: focus on education, work and saving, meritocracy, democracy, protectionism in the past but liberation and global engagement now etc. Lee was a smart, thoughtful, blunt and provocative man.

There are two equalizers in life: the Internet and education. Lee Kuan Yew is a world leader who understands this and is using the power of the Internet to position Singapore for survival and success in the Internet economy. – John Chambers

He has the most modern and most strategic view of anyone I have met for a long time. – Madeleine Albright

Today, Singapore is a rich and prosperous country. If the rest of the world could accomplish what Singapore has accomplished, the world would be a better and more prosperous place. He is a man who never stops thinking, never stops looking ahead with larger visions. His views are sought by respected senior statesmen on all continents. – Joseph Nye

Lee is the smartest leader I think I ever met. – Tony Blair

Towering genius disdains a beaten path. – Abraham Lincoln

Lee Kuan Yew transformed Singapore into a modern and prosperous nation. He is the ‘sage of Singapore’. Many world leaders have been inspired by him. This book focuses on the future of the world economy.

Of course. This reawakened sense of destiny is an overpowering force. It is China’s intention to be the greatest power in the world – and to be accepted as China, not as an honorary member of the West. – Lee Kuan Yew

The Future of China. Is China aiming to be number 1? How does China see the US? China is going to be the world’s biggest economy in the next 20 years and want to be number 1. They are the fastest developing nation. This reawakened sense of destiny is an overpowering force. Their policies are gearing them to be number 1. No one should offend them as they could easily impose economic sanctions. Will China want to impose their imperial status when they are number 1? They tell others to be more respectful of them. China believes in tapping on their skilled and educated workforce. They will practice diplomacy. Although not as strong in terms of military strength as the US, they are deter any aggression by trading heavily with them. They are moving towards the market system of economy. China has to avoid wars like Germany and Japan and not be obsessed with power. Also, they have to avoid being like Russia, which spent too much money on military. The younger generation needs to learn about the rich Chinese history and how they have overcome difficulties in the past. To Asia: ‘come grow with me’, ‘choose to be my friend’. They are more concerned using diplomacy rather than force. Governance problems, as well as culture; language might affect their success. Chinese language is very difficult to master. Their culture allows less expression of creativity and exchange of ideas. It is hard to change culture due to their illustrious history. Also, some of the structures that were recommended by Stalin are still in place. There is also the rich poor divide to worry about. It is hard to monitor so many people, once they move into the cities. They depend on other nations for resources as well. Currently, China wants to grow with the US and tap on their expertise. LKY expects double digit growth to happen in the near future. However, China won’t turn into a liberal democracy. They still believe in the power of communism. Now, they realize the need for the rule of law. Clear laws strengthens the economy. If it is peaceful, China won’t lose. Their chance of being number 1 is 80%. Xi Jinping had a tougher life than Hu Jintao. LKY thinks that he is impressive, just like Nelson Mandela.

Theirs is a culture 4000 years old with 1.3 billion people, many of great talent – a huge and very talented pool to draw from. How could they not aspire to be number 1 in Asia, and in time the world? – Lee Kuan Yew

The chief challenges are culture, language, an inability to attract and integrate talent from other countries, and, in time, governance. – Lee Kuan Yew

While I once advised a Chinese leader to make English the first language of China, clearly that is not realistic for such a great, confident country and culture. But it is a serious handicap. – Lee Kuan Yew

He is reserved – not in the sense that he will not talk to you, but in the sense that he will not betray his likes and dislikes. There is always a pleasant smile on his face, whether or not you have said something that annoyed him. He has iron in his soul, more than Hu Jintao, who ascended the ranks without experiencing the trials and tribulations that Xi endured. – Lee Kuan Yew

China is sucking the Southeast Asian countries into its economic system because of its vast market and growing purchasing power. Japan and South Korea will inevitably be sucked in as well. It just absorbs countries without having to use force. – Lee Kuan Yew

The Future of the United States. LKY believes USA has the ability to rebound well. It has an illustrious history and track record. For the next 20 to 30 years, they will remain the sole superpower. They are very powerful economically and in terms of their military. They have a say in almost every international issue. Also, they have a culture of embracing talented foreigners. USA has a rich entrepreneurial culture, where people are not afraid of failure. English language is also easier to learn. USA has great and noble ideals. The US government has the problem of each succeeding president refusing to take unpopular measures in the fear that they will lose votes. As a result, budget deficits often carry over to the next administration. The presidential system is also flawed, as compared to the parliamentary system. For the parliamentary system, the citizens will know you for a period of time at least. Whereas for the presidential system, anyone can run for it. Media can make a person seem very attractive/popular. LKY believes more in discipline, rather than democracy. The American system is very difficult to run. The problem with US is that social problems like guns, violent crime etc, disrupts society. You cannot let people do their own thing all the time. Individual supremacy cannot be carried to an extreme. Individual rights at the expense of the community. Multiculturalism will destroy the US, esp from immigrants as they will dilute their culture. A mediocre system of government with top people at the top is better than an excellent system of government with poor people at the top. USA needs to control their fiscal deficit properly. They cannot to have other countries withdrawing their assets from the USA.

If people have lost faith completely in their democratic institutions because they cannot find people of calibre to run them, however good that system, it perishes. Ultimately, it is the people who run the system who make it come to life. – Lee Kuan Yew

America’s strengths include no grooved thinking but rather an ability to range widely, imaginatively, and pragmatically; a diversity of centers of excellence that compete in inventing and embracing new ideas and new technologies. – Lee Kuan Yew

Americans have a can-do approach to life: everything can be broken up, analyzed and redefined. Whether it can or it cannot, Americans believe it can be solved, given enough money, research, and effort. – Lee Kuan Yew

The American culture…is that we start from scratch and beat you. – Lee Kuan Yew

They went into an empty continent and made the best of it – killed the Red Indians and took over the land and the buffaloes. So this is how they ended up – you build a town here, you be the sheriff, I am the judge, you are the policeman, and you are the banker, let us start. And this culture has carried on until today. There is the belief that you can make it happen. – Lee Kuan Yew

When you have popular democracy, to win votes you have to give more and more. And to beat your opponent in the next election, you have to promise to give more away. So it is a never-ending process of auctions – and the cost, the debt being paid for by the next generation. – Lee Kuan Yew

Your presidents, I mean, like Jimmy Carter…my name is Jimmy Carter, I am a peanut farmer, I am running for president. The next thing you know, he was the president. – Lee Kuan Yew

I do not believe that if you are libertarian, full of diverse opinions, full of competing ideas in the marketplace, full of sound and fury, therefore you will succeed. – Lee Kuan Yew

They say people can think for themselves? Do you honestly believe that the chap who cannot pass elementary school knows the consequences of his choice when he answers a question viscerally, on language, culture, and religion? But we knew the consequences. We would starve, we would have race riots. We would disintegrate. – Lee Kuan Yew

If you follow the ideological direction of Europe, you are done for. There will always be a tussle within societies, as underachievers want more support, but addressing their needs must be done in a way that does not kill incentive. – Lee Kuan Yew

The Future of US – China Relations. China is just acting on its own national interests and not interested in taking over the world. China can tap on US technology so having conflict is not ideal. Many feel that a US military presence should be maintained. The world will be very different if the US is experiencing conflict. The US must always support Japan. Many Asians still thank the US for their involvement in WWII that allowed them to prosper afterwards. Many countries are now on US’s side after how President Nixon befriended them. The US must try to build as many FTAs as possible. The US should not try to change China into a democratic society. Neither should the US try to threaten China. China has been through a lot, like the Great Leap Forward and the Cultural Revolution. They now want lasting peace. It is important that the younger generation are not hostile but instead, accepting and understanding.

American society was so successful for so long not because of these ideas and principles, but because of a certain geopolitical good fortune, an abundance of resources and immigrant energy, a generous flow of capital and technology from Europe, and two wide oceans that kept conflicts of the world away from American shores. – Lee Kuan Yew

The US cannot stop China’s rise. It just has to live with a bigger China, which will be completely novel for the US as no country has ever been big enough to challenge its position. China will be able to do so in 20 to 30 years. – Lee Kuan Yew

So if I were an American, I would speak well of China, acknowledge it as a great power, applaud its return to its position of respect and restoration of its glorious past, and propose specific concrete ways to work together. – Lee Kuan Yew

…To engage or to isolate China. You cannot have it both ways. You cannot say you will engage China on some issues and isolate her over others. You cannot mix your signals. – Lee Kuan Yew

Make them feel that they are stakeholder, and if this earth goes warm, they will be in as much trouble as anyone else. – Bob Zoellick

The Future of India. There is too much bureaucracy that makes it hard to grow economically. There is also excessive corruption that destroys state planning. There are many layers of review before laws can be passed and the constitution changed. In addition, infrastructure is poor and it is running large deficits. Their government has not been able to follow Infosys’ model. The British took over them. There are too many dialects in India. The Brahmins are smart. However, if you marry a non-Brahmin, you go down in caste. Many of their businessman are also corrupt, who just want to make money at the expense of the society. India’s capital markets are stronger than China’s. So are their legal and banking systems. Their average age is also younger than China. To succeed, they have to build better infrastructure and move to the urban areas. India was going the slow path after LKY failed to convince Indira Gandhi to change things. They need to focus more on their manufacturing sector. Major nations all need to start off from an industrial state. They need to cut down on corruption levels and bring in FDIs. Also, the level of education is not sufficient as many drop out of primary school. The unions do not want to be privatized as if the workforce is more efficient, many would lose their jobs. They were too self-reliant on their past. India is much bigger than the whole ASEAN put together. China’s GDP is 3.5 times more than India. India is getting involved economically but building international ties. LKY wanted India to play a guardian in the political stability and economic development in South East Asia.

The caste system has been the enemy of meritocracy…India is a nation of unfulfilled greatness. – Lee Kuan Yew

Indians will go at a tempo which is decided by their constitution, by their ethnic mix, by their voting patterns, and the resulting coalition governments, which makes for very difficult decision-making. – Lee Kuan Yew

India is not a real country. Instead, it is 32 separate nations that happen to be arrayed along the British rail line. – Lee Kuan Yew

Nehru and Gandhi had a chance to do for India what I did for Singapore because of their enormous prestige, but they could not break the caste system. – Lee Kuan Yew

Political systems that yield inferior economic performance will ultimately be discarded for those that are more protective. – Lee Kuan Yew

I have a selfish motive in wanting India to emerge as early as possible as a major possible economic power in world politics. If India does not emerge, Asia will be submerged. – Lee Kuan Yew

The Future of Islamic Extremism. The divide is between Muslim terrorist and the US, Israel, and their supporters. This is the fight for Islam. It is hard to clamp down on terrorists. In addition, they possess weapons of mass destruction. Radical Islam is the problem. They feel that the West has hindered their growth. Americans are usually their target. Arabs have been taught to hate Jews and Israelis. US has a role to play in eradicating this. Muslims in SEA have changed because of the fact that many participated in the Jihad in Afghanistan. Saudi Arabia was also rich from oil and spread their teachings. Those radicals are also known as jihadists. In the past, SEA muslims were calm. However, in the past 30 years, some have learnt about Wahhabism. The plan is to drive the US out of Iraq. Jihadists are willing to sacrifice themselves. The US cannot afford to leave Iraq as it will give the Taliban regime strength. With NATO support, the moderate Muslims can fight off Islamic extremism. Moderate Muslims must have the courage to speak out against these radicals. There is a battle between extremist Muslims and the rationalist Muslims. Force alone is not sufficient. You need to tackle the queen bees (preachers too).

But the Muslims believe that if they master the Qu’ran and they are prepared to do all that Muhammad has prescribed, they will succeed. So, we can expect trouble from them and so, it happened. – Lee Kuan Yew

I do not see the Islamic extremists winning, and by that I mean able to impose their extremist system. I can see them inducing fear and insecurity, and causing fear, but they do not have the technology and the organization to overwhelm any government. – Lee Kuan Yew

With the killing of Osama bin Laden, the Islamic extremist movement has been franchised out, and each group works on its own. It is accordingly more diverse and difficult to pin down. – Lee Kuan Yew

The objective must be to reassure and persuade moderate Muslims…that they are not going to lose, that they have the weight, the resources of the world behind them. They must have the courage to go into the mosques and madrassa and switch off the radicals. – Lee Kuan Yew

You must use force. But force will only deal with the tip of the problem. In killing the terrorists, you will only kill the worker bees. The queen bees are the preachers, who teach a deviant form of Islam in schools and Islamic centers, who capture and twist the minds of the young. – Lee Kuan Yew

For Part 2, click here.

The Defining Decade (Your 20s) by Meg Jay

Why your twenties matter and how to make the most of them now

This book is for people in their twenties. The author is a clinical psychologist who worked with people of that age group. This is the generation where things aren’t very stable. The twenties can be the most productive phase of your life.

What happens in your twenties will affect what your life will be like in the future. You can’t change as much in your life in your 30s. You should make use of your twenties.

Do not waste till you are 30 before you act. You may regret doing that. ‘The unlived life is not worth examining’. Kate had a difficult past and was affected by it. She was disappointed because she knew she wasted her twenties thus far. Times are changing and people are getting married later. Now, some people felt that it would be the wandering years. The problem with this is that they don’t start planning for their future. Short-term work and internships have replaced permanent jobs. A lot of them didn’t expect their twenties to be so difficult. You will find things harder to get going when you’re in your 30s. Everyone deserves to make the best use of their 20s. The book introduces the concept of identity capital. Learn to navigate your twenties well.

Identity Capital. Some people suffer an identity crisis at this stage of their lives. Sometimes, you need time to discover your true identity. Identity capital is a collection of your assets. These consists of both hard and soft skills that can be placed on a resume or not. After college, I went camping and on adventurous expeditions. The work was both meaningful and fun. You need to earn door-opening identity like a camping trip. Some underemployment creates skills that you can include in your resume. However, do not take too many small jobs which are part-time etc. Unemployment in your 20s might result in heavy drinking habits in your later years. Your wage growth occurs mostly in your early wage growth. Research indicates that salaries peak in our 40s. Take jobs with the most capital. Working at a coffeeshop had low capital. Use the capital to generate more for yourself.

That’s why I wish I had done more during the first few years out of college. I wish I had pushed myself to take some work leaps or a wider range of jobs. I wish I had experimented – with work – in a way I feel I can’t right now at almost thirty. I felt a lot of internal pressure to figure it out, but all the thinking I did was really debilitating and unproductive. The one thing I have learned is that you can’t think your way through life. The only way to figure out what to do is to do something. – Helen

Weak Ties. Learn to meet someone new etc. This book came about because of weak ties. Your urban tribe is a bunch of very close friends. Unfortunately many people do not interact with others outside their circle. Most of the jobs you will encounter come from people with weak ties. Birds of a feather flock together. This explains why homogenous cliques form. Weak ties expose us to new material. Weak ties encourage us to communicate more formally and professionally. Networking is actually a good thing. Have courage to call your friend. Weak ties and communication within your community are the key. If weak ties do favors for us, they start to like us more. If you want someone on your side, ask for a favour. This is the foot in the door strategy. One more favour may lead to bigger ones in future. Altruism is linked to happiness and better health. Make yourself interesting and relevant if you want to earn favours from others. Ask for a clearly defined favour. ‘A wise man makes his own luck’. Have the courage to approach your weak ties.

The Unthought Known. Uncertainty is always present. Don’t wait for someone to pick you up and direct you in a certain direction. Making choices is the key. The longer you wait, the less options will be available to you. The more choices you have, the more decision fatigue you will experience. Narrow down your choices to six at most. Look past at your past and achievements. Unthought knowns are things we know about ourselves but forgot somehow. We are afraid of disclosing this to anyone at all.

Not making choices isn’t safe. The consequences are just further away in time, like in your thirties or forties. – Meg Jay

My Life Should Look Better on Facebook. For many people, Facebook meant stalking others and looking at your friends. Judging happened and it was not pleasant. It is a way of keeping up with the times. They feel jealous over the success of others on Facebook. Everyone doesn’t post their troubles on FB. You can be too caught up with a particular image your parents want you to be. Goals are from within, shoulds are from the outside. Learn to focus on the task at hand and don’t bother about anything else.

The Customized Life. Some youth don’t want a 9 to 5 job. They want to have a distinctive life. Difference is what gives our lives some meaning. However, it is easy to want to be different. Having a positive identity is much harder. Learn to be affirmative instead. Start to work on your resume when you are young. Ian owned a custom bike. That gave me a clue about what he wanted in life. However, even a customized bike has its own common parts with other bikes. You need a good story in your life. Spin a story on your interests and talents. How does your past story relate to what you want in future. Create a shaper narrative and sound convincing.

This is how it’s done. This is how it starts. Claiming a career or getting a good job isn’t the end; it’s the beginning. And, then, there is still a lot more to know and a lot more to do. – Meg Jay

Society is structured to distract people from the decisions that have a huge impact on happiness in order to focus attention on the decisions that have a marginal impact on happiness. The most important decision any of us make is who we marry. Yet there are no courses on how to choose a spouse. – David Brooks

Love: An Upmarket Conversation. Your 20s are when you will spend time alone. The marriage age is increasing for developed nations. A divorce is extremely painful and will haunt you in future. There are actually many people who want to settle down. Divorces can lead to massive unhappiness. According to research, getting married late ain’t the best option. Once at 30, singles start to panic. The moral of the story is to take all your relationships seriously. Start thinking about marriage in your 20s. Start planning early. Be choosy about the right things in your 20s.

Dating for me in my 20s was like this musical chairs thing. Everybody was running around and having fun. Then I hit 30 and it was like the music stopped and everybody started sitting down. I didn’t want to be the only one left without a chair. – Cathy

Picking Your Family. Things start and end with the family. Successful people brim with confidence. Some successful youth are good at hiding their troubles. Emma felt lonely and her parents were undergoing a difficult time. Friends can only do that much. Families are more important. Sometimes, you need a new family. She also had a difficult relationship with her boyfriend. She also didn’t like how unambitious her boyfriend’s parents were. Learn to partner someone else. Later, she ended the relationship. You must take love as seriously as work. Marriage is a commitment between 2 individuals. If you have a broken family, learn to create a better one in future.

The Cohabitation Effect. In psychotherapy, slowing down your thinking helps. Cohabitation is becoming more common. Many people thought moving in together before marriage would be a good idea. However, according to research, doing this is bad and leads to higher divorce rates. Why doesn’t it work? The problem was that most people didn’t consider it carefully before doing it. People have different agendas during cohabitation as well. Everything tends to appear fuzzy at this stage. However, if couples are engaged and then subsequently cohabit, there are no divorce rates. Do not enter seemingly low-cost and low-risk situations where you can’t get out subsequently. Switching costs are involved and can be very large. After you are 30, the switching costs are even higher. Divorce seems like a big thing for those in their 20s. It is better to get clear on a person’s commitment level before cohabiting.

It is the couples who live together before being clearly and mutually committed to each other who are more likely to experience poorer communication, lower levels of commitment to the relationship, and greater marital instability down the road. – Meg Jay

On Dating Down. Do not simply accept anyone when dating. You must suffer a lot of emotional trauma if you do that. Many people have some form of self-cure. For instance, one could listen to angry, hurtful songs. Psychologists find it difficult to cure this. Your coping strategies might cause you to be even more alone. Your iPod can’t be your best friend. Some people engage in such behaviour because they are lonely. The patient felt desperate and wanted to have sex. In our 20s, we have the most self-defining memories. Stories become part of our identity. Write a good story and edit it such that it will sound good. Think about what you want in a partner. Revise your own story.

If someone doesn’t want me, I feel awful. My confidence goes down. If there isn’t a guy in my life, it’s like a desert to me. Each person who wants me feels like an oasis. Like maybe this will be the last person to want me. I feel like I have to drink up. I have to take whatever I can get. If I don’t find someone, I view it as being rejected by everyone. – Cathy

What counts in making a happy marriage is not so much how compatible you are, but how you deal with incompatibility. – Leo Tolstoy

By this I mean 2 things: being alike in ways that matter and genuinely liking who the other person is. Often these go hand in hand. That is because the more similar two people are, the more they are able to understand each other. – Meg Jay

Being In Like. Compatibility is a good thing to have. Travelling to a third world country together with your spouse is indeed very thrilling. However, education and background are not the true similarities. These are deal breakers, not deal makers. They may bring couples together, but it won’t guarantee happiness. Instead, one should consider personality. There are Big 5 personality profiles. They are ‘Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism’. For every one of them, there are various levels (low, medium, high). There are no right or wrong personalities. Personality convergence is possible after hanging out with each other for a long time. However, this rarely happens. Neuroticism is an accurate predictor of relationship unhappiness. What people wants from marriage change over time.

The same way you make any decision. You weigh the evidence and listen to yourself. The trick is going to be to listen to what matters, not every single thing that makes you dissatisfied or anxious. – Meg Jay

The more you use your brain, the more brain you have to use. – George A. Dorsey

The Brain and the Body: Forward Thinking. Patients with frontal lobe damage have reduced ability to interact and make social connections. The frontal lobe is only mature in our 30s. Forward thinking comes with practice and experiment. Large social networks change our brains for the better. You must fully utilize your brain in your 20s. It is time to get busy now.

Calm Yourself. People in their 20s are too excited and do not possess the right protocol for work. They need to calm themselves down. People tend to remember better bizarre incidents and emotional events. Creating flashbulb memories are important in your 20s. The brain, at this stage, is also more prone to negative information. With age, comes the positive effect. Quitting your job isn’t always the best solution to a problem. Do anything not to get that blitz feeling. Constant worrying will lead to negative thoughts. You can control your reaction to a situation. Re-evaluate situations based on the facts. Learn to take control over your emotions.

Inaction breeds fear and doubt. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy. – Dale Carnegie

Outside In. Believe in a growth instead of a fixed mindset. A fixed mindset will affect your success levels in future. Confidence comes from the outside. It comes from mastery. Confidence comes after demonstrating that you could do the job effectively many times. People build resilience after overcoming difficulties and setbacks. The book talks about the 10,000 hours concept. It takes time to be good at something. You need feedback to improve yourself. You can fall in love and have a good job. It does not have to be mutually exclusive.

Getting Along and Getting Ahead. Most people’s personalities are fixed by 30. 20s are the best time for change. Employed people are happier than those who are unemployed. You need to invest in yourself to feel better. Even having simpler goals makes one happier. Your goals help to shape your personality. Learn to manage your emotions. Being single in your 20s can have detrimental effects in your 30s as well.

Every Body. People are having children at a later age. Educated parents are beneficial for the bringing up of children. There are an increasing number of women in the workplace. Many people in their late 20s want to have a kid. The biological clock will tick inside you. Older sperms might be linked to neurocognitive problems in future. Learn to decide at an earlier stage of your life. Fertility is highest when one is in their 20s. Egg quality decreases over time. You have to have sex for longer periods of time to increase the chances of having a baby in future. Fertility clinics are very expensive and have low chances of success. IVF is risky as well. Many people grief because they wanted a kid too late in their lives. Postponing marriage and children might lead to more stressful lives.

To achieve great things, two things are needed: a plan, and not quite enough time – Leonard Bernstein

Do The Math. Time flies and sometimes you wonder where did it all disappear too. Retirement planning is never on the cards for those in their 20s. People tend to value the present over the future and they save too little. People in their 20s are prone to present bias. Learn to write the last sentence of your life and then work backwards to determine what you should do.

Epilogue: Will Things Work Out for Me? Prepare and know as much about adulthood as you can. People in their 20s want to feel important and that what they do matters.

The future isn’t written in the stars. There are no guarantees. So claim your adulthood. Be intentional. Get to work. Pick your family. Do the math. Make your own certainty. Don’t be defined by what you didn’t know or didn’t do. You are deciding your life right now. – Meg Jay