http://www.aseannewsnetwork.com/2005/07/singapore-review-legitimized.html

Thursday, July 21, 2005
Asean News Network: Legitimized Corruption Understood
From: Carl Kapeland
To: Mellanie Hewlitt
#Article posted by Wolfgang Holzem / Erwan Shah @ 10:47 AM

Dear Mellanie

In the latest developments the entire National Kidney Foundation
Board of Singapore and its CEO have taken the easy route out and
resigned. That's leadership for you, when things get messy, just get
up and leave the mess for someone else to clean up.

But I don't think the new CEO or Board will do much cleaning up.
Looks like they are replacing one bunch of rotten apples with another
bunch of potentially more rotten apples. It does not address the real
problem.

WHAT IS THE REAL PROBLEM?
There are several recurrent issues here. Singapore is in this current
mess because Lee's PAP Government has forgotten that not everything
can be reduced to money. You cannot throw money at all your problems
and expect it to magically disappear.

The material base that motivates Singapore's "leaders" is only too
evident when the NKF's transit CEO (Gerald Ee) hinted
that "SGD600,000/- may not be sufficient for the new replacement to
take office"!!! Money is the only motivating factor and if they have
elected a leader and a board who is motivated only by money, its only
a natural and unavoidable result that they will end up with an
organization which has forgotten its once noble purpose and replaced
it with more materialistic pursuits.

Have they (Singapore) appointed a Wolf in sheep's clothing to guard
their precious flock? For positions like these in charity
organizations, THE CHIEF MOTIVATING FACTOR CANNOT BE MONEY! as they
are not running an investment bank.

The same applies senior public service positions and for ministerial
positions. NOT EVERYTHING CAN BE REDUCED TO MONEY. But Lee's PAP
Ministers have used this holistic approach to address any and all
issues under the sun.

Lee and his ministers simply CANNOT RUN A COUNTRY THE SAME WAY THEY
RUN A COMPANY. Why? Because a country comprises of flesh and blood
and spirit. A company is merely a corporate vehicle that is often set-
up for the sole purpose of reaping a monetary profit.

SINGAPORE AS A COUNTRY, IS NOT SINGAPORE INC!!!! And even if it is,
its directors (and that means Lee and his million dollar cabinet)
have to remain accountable to the shareholders (Singapore citizens).
Singapore MINISTERS have to be transparent, and they are not
especially as regards their salaries and the management of the
country's reserves.

Consider this, the NKF was originally set up as a supposedly
charitable organization. In form and function it appeared above board
and reputable. But in actual practice it had a hidden agenda to
siphon wealth from the public into state coffers. And what happens to
all this money (all SGD200 million of it?) No body knows.

These same similarities in the NKF saga are reproduced on a grander
scale in overall state administration in Singapore. Whether its the
CPF, LTA, GLCs, Temasek etc they all relate to the same basic
issue. It goes back to the same bunch of corrupt leaders paying
themselves and their cronies humongous ridiculous salaries, approved
and legitimized under a set of bogus laws that they legislated in the
first place.

But even before this NKF scam, transparency issues have dogged
Singapore's state administration for decades and repeated requests by
the World Bank, IMF, FTA and other NGOs for greater accountability
and transparency have basically fallen on deaf ears.

These are basic transparency issues which plaque management of public
moneys by all state entities (whether its the CPF Board, GLCs,
Temasek, LTA etc). There is massive deception on a grand scale and I
suspect the latest NKF debacle only surfaced due to internal friction
within Singapore's "inner-circle of elite politicians." Perhaps
someone amongst Singapore's Ruling Elite wanted a bigger portion of
the loot.

Think about it. Durai commenced his latest law suite on the confident
assumption that it would be a "no contest" walk-over like his two
previous suites. But whilst the Singapore sham courts had no problems
finding in his favor in the 2 previous suites (which were taken
against private individuals and a volunteer who correctly questioned
his lavish spending), the latest suite was against another state
bureaucracy.

And it was inevitable that the sham court found in favor of the
bigger devil. So even amongst the thieves there is a power struggle
over who gets a bigger piece of the loot.

So this then is justice ala Singapore styled. Who you are and who you
are connected with ultimately decides the outcome of the law suite.

The material facts of the case (and legal premise) have little
relevance in the kangaroo court's final assessment.

But by far the most troubling problem is that of Legitimized
Corruption. You (Mellanie) have used the term "Legitimized
Corruption" very accurately, but failed to elaborate on its true
meaning and implications.

Legitimized Corruption means essentially that the corrupt act itself
is made perfectly legal. That is why there is a possibility that the
external audit on NKF may turn out nothing because Durai and his
actions may have been all perfectly legitimate and authorized
according to the internal constitution of the Board.

In a normal organization with bona fide controls in place, the Board
would not have approved and allowed such unreasonable and lavish
expenditures. However, in Singapore's setting where "anything goes"
it is possible that the board were within their discretionary powers
to authorize such lavish expenditures. Mind you these are
expenditures which (by any ordinary definition) would have amounted
to an immoral mis-management of public moneys for unauthorized
applications. But if the internal rules of conduct of NKF allowed the
Board to act in this manner, it would then be an authorized and
legitimate act.

So even after the process of audit has concluded it is perfectly
possible for the auditors to conclude that the use of donor funds for;

a) Durai's pay of SGD600,000 and his salary of SGD1.8 million;

b) All expenses and application of donor funds used for purchase of
SGD990/- god taps;

c) All expenses for first class air travel;

d) The levying of a 30% Admin Fee;

e) The hiring of personal drivers and limos.

All of the above are authorized and legitimate.

Anyway we all know that the so called "audit" of the NKF accounts is
merely a publicity stunt to show case to the world that the current
government and the new board is taking steps to remain accountable.

But does this make the above acts any more acceptable and morally
correct. NO! Of cause not. An atrocity is still an atrocity even
though it is legitimized.

One clear example is prostitution in Singapore. It is legal and the
fact that it is legal does not detract one iota from the fact that it
is still immoral, depraved and inhuman.

Of cause there are critics who will argue that moral values are to
subjective concepts and we cannot always use these imprecise measures
to define what is right or wrong. And I concede that there is some
truth in this as we live in a world coloured in gray.

However, there will always remain some acts which are so blatantly
wrong that they remain morally objectionable and immoral by any
standard and yardstick. And the NKF scam (as well as Singapore
ministerial salaries) fall within this category. It is morally wrong
by any measure and this is not a gray area at all.

This same logic applies on a larger scale as regards ministerial
salaries and the process that is orchestrated to "approve" such
unreasonable and lavish salaries (amounting to millions of dollars
per minister).

Legitimized Corruption works much like Money Laundering, but is
worse. In essence Legitimized Corruption is corruption which is made
legal. These perpetrators attempt to do what drug cartels and money
launderers do;- basically "launder" the money (or the dishonest act)
and make the final product appear nice and clean.

But senior politicians differ from your average drug lord or mafia
boss in one important respect;- these ministers are much more
sophisticated. They know the system (and probably designed it) and
know how to manipulate and tweak the system so that they can have
access to the ill-gotten gains without getting their hands dirty.

Next to them, Gordon Gecko and the God-Father look like novices and
vestal virgins.

However make no mistake the underlying act itself remains wrong,
dishonest and morally objectionable but is hidden under a cloak of
legitimacy. Drug money (and money from dishonest trades) is still ill-
gotten loot. Behind this elaborate sham are a host of corporate and
state entities (GLCs, state owned entities and yes, charitable
organizations) which are set-up to place a corporate veil between the
real perpetrators and the morally objectionable and dishonest
transaction.

The fact that it is perfectly legitimate does not itself make it
MORALLY CORRECT.

This is especially the case when you have a legislature that is
totally removed (and remains out of touch) with the moral values and
aspirations of the people it is supposed to serve and protect.

In fact, this kind of legitimized corruption is the worst possible
kind as it means the corruption has infiltrated the most senior ranks
of management (and the political leaders).

Compared to this elaborate deceit, the more obvious corruption in
Indonesia are crude by comparison and far easier to identify and
correct as it is acknowledged that such objectionable acts itself are
WRONG and are not endorsed by the country's laws.

How do you ask a cop to catch a thief when the cop himself is a
thief?

Legitimized Corruption by its very nature is more sinister and
difficult to identify. For instance, a government official who
accepts bribes worth $1.6 million a year is guilty of corruption. But
what happens if this same official or minister receives this money as
part of his "LEGITIMATE" salary.

In both cases the act itself is the same unconscionable and immoral
act. But in the later case, there is no need for the official to hide
his ill-gotten gains as it is
formally endorsed by an equally corrupt legislature/parliament who
has a hand in the ill gotten gains.

The definition of a Parasitic Leech is as follows: "leech: a follower
who hangs around a host (without benefit to the host) in hope of gain
or advantage"

The kind of legitimized corruption already endorsed and prevalent in
Singapore's state machinery is far worse. It is a cancerous malice
which is more surreptitious and insidious.

The festering rot is not immediately apparent to an external casual
observer but is eating away the core of the its host. Left unchecked,
such parasites will consume a once healthy body before discarding the
empty shell and relocating to another unwary host.

Legitimized Corruption is also like cancer. It is a chronic ailment
which rooted itself very deeply within the host (and the state
machinery). Such a chronic ailment did not occur over night but took
place over decades of accumulated unchecked accesses.

Durai himself was in the NKF for over 30 years and it is no mere
coincidence that
Singapore has been under the same government (and people and family)
for over 30 years.

This is precisely the reason why in the US and other bona fide
democracies there is a mandatory change in administration every 4-8
years. A new administration brings forth a completely new government
which will was away unchecked accesses and commence things tabula
rasa.

But somehow in Singapore it appears that only families starting with
the Lee surname or who are closely affiliated with this first family
are the only candidates who qualify for election.

What a quaint and family friendly arrangement! Its just too bad that
the average
Singaporean is excluded from this elitist inner-circle.

However, Singapore's Ruling Elite also have to be wary of the
accompanying dangers of in-breeding which can occur from a small and
exclusive gene pool. Cancerous deformities can result after
generations of in-breeding.

And the Cancer has many signs and symptoms. There have already been
many evident tell tale signs of the internal rot and its accompanying
putrid stench. However, Singaporeans in their numbed state of
awareness may be mistaking the over-powering stench of decay for
sweet perfume.

The entire state machinery is orchestrated to maintain this state of
illusion and deception.

In the normal mechanics of an open and transparent state legislature
and government, the moral values of the mans on the street is
reflected (although not perfectly) in the policy formulation process.

This is not the case in Singapore and your "leaders" know it. Just
challenge them to run a referendum regarding their salaries and it
will be evident that 90% of the population are totally disgusted by
such blatant acts of greed.

Of cause the local state owned media will somehow always paint the
picture of an adoring and obedient public as part of an elaborate
charade. So the truth never ever gets out.

Corruption of this scale starts form the top and slowly works its way
down the ranks to pollute every senior arm of the state machinery
from the Judiciary to Legislature to the Executive and especially to
a docile and compliant state managed local press.

It cannot be stopped easily without external intervention.

Slowly but surely what started off as a morally unacceptable issue
becomes part and parcel of "accepted norm" which is disguised behind
a pile of state endorsed laws and bills.

Even the once sacred document, the Constitution, is not spared and is
re-written to the whims and fancies of those they serve. How many
Singaporeans are aware of the fact that the country's Constitution has
been amended to allow state owned entities and GLCs easier access
directly to the country's reserves?

And it also does not take a genius to work out that it is the close
affiliates of the Ruling Elite who sit on the management boards of
these state owned entities and GLCs.

The following is a fascinating observation. The exact size of
Singapore's foreign exchange reserves and the management of those
funds is designated as a STATE SECURITY FOR INTERNAL SECURITY REASONS.

Is it mere co-incidence that the conservative ball park estimate of
the net worth of the Lee family is roughly equivalent to your
country's reserves? (USD130-140 billion?)

What you have in Singapore are a bunch of hired mercenaries who are
ripping off the very people they are supposed to look after.

Singaporeans. This is your country and your life. If you continue in
this state of drugged apathy, you will cease to have any control over
your own faith and destiny.

Do you really want to hand over your life to the devil?

Do you want to have a Singapore with No Singaporeans?

Its time to wake up from your state of denial and confront the harsh
reality before your very eyes.

Yours faithfully
Carl Kapeland
Ohio State

#Article posted by Wolfgang Holzem / Erwan Shah @ 10:47 AM
http://www.aseannewsnetwork.com/2005/07/singapore-review-legitimized.html

File        : S'pore Has Lowest GDP & Highest Paid PMs In The World!.doc
Description : Singapore has lowest GDP but highest paid PM in the world!

A Sg_Review Exclusive; Special Focus on GLC=TLC=GIC
By: Mellanie Hewlitt
9 Oct 2003
Singapore Review

There's a new buzzword in town - TLC. Until recently, I always thought
that  the acronym "TLC" referred to Tender Loving Care. But the
Singapore Government  has now coined a new phrase in a bid to distance
itself (in the eyes of the  public) from state runned and state funded
corporate entities.

Like it or not, Temasek Linked Companies, or TLCs, fall within the
larger subset of "GLCs" which are viewed suspiciously by the general
public. Many old hands in the industry will recognize this as basically
old wine repackaged in a  new bottle. On the surface, these entities
look and sound like bonafide  business concerns. Many are listed on the
Singapore Stock Exchange. But this is  a skin deep appearnce which ends
when one peers into the internal management of these companies.

Peering beyond the cosmetic acronyms, the discerning observer will note
that in reality, little has changed as regards management of
Singapore's GLCs/TLCs/GICs (or whatever fancy new terms the authorities
wish to coin) and the old issues concerning TRANSPARENCY,
ACCOUNTABILITY, NEPOTISM and PERFORMANCE still remain.

Deep pockets into public funds, operating in heavily regulated and
protected markets and managed by retired Brigadiers, senior civil
servants, ex-Ministers and other members of Singapore's Ruling Elite,
these lumbering government vehicles are also known as scholar havens
and double as "retirement homes" for Singapore's Ministers and senior
civil servants. All this at tax payers expense.

It is small wonder why GLC/TLC/GIC and other state owned entities in
Singapore are regarded with a degree of suspicion and wariness by
bankers and professionals within the financial industry. Many within
Singapore's well heeled financial circles affectionately referr to GLCs
(Government Linked Companies) as Giant Loss Making Entities or Giant
Lee Companies.

Ever wonder what happens to your CPF moneys and Tax Dollars?Look no
further.In a paper published in 2000, Morgan Stanley's Singapore office
estimated the size of Singapore's external economy at S$395 billion
against the governments figure of S$339 billion at the end of 1999 or
2.4 times GDP. That was 3years ago and today in year 2003, this figure
is probably much larger.

The investment is held in the form of direct equity, portfolio
investment and other foreign assets. Morgan Stanley's Daniel Lian says
the Singapore government owns more than 50 per cent of the external
economy through GLCs (government-linked corporations) which control
about 60 per cent of offshore investment.

As Morgan Stanley's research paper says: "The external economy needs to
secure a minimum eight per cent nominal return to avoid dragging down
the overall economy from achieving its long-term growth potential of
6.5 per cent. The task of raising returns lies in the hands of the
government and the GLCs."

Offshore return has been declining as GLCs step up their investment.
One probable cause, says Morgan Stanley, is poor investment judgment.
Singapore wants to move into new high-tech industries, including
biotechnology areas requiring high human and intellectual capital. But
in an economy essentially driven by government policies, Singapore
lacks a crucial ingredient - entrepreneurship.

It is also noteworthy that frank and open coverage of GLCs/TLCs/GIC
usually originate from the international press. Locally, within
Singapore's heavily regulated media industry (until recently) there is
scant mention of these government owned corporate entities which
usually operate behind a veilof
secrecy. And where there is occasional mention of these elusive and
painfully shy corporate creatures by the local media, Singapore Press
Holdings (which has a virtual monopoly on Singapore's print media
scene), these are usually adoring letters of admiration. This is hardly
surprising given that SPH is itself a TLC.

But the harsh economic reality today is that far from adding value to
Singapore's bruised and battered economy, GLCs, TLCs and GICs are a
real drag on the economy. The time is long overdue to retire these loss
making relics and allow private sector economics to take its natural
and inevitable course.

In this Sg Review exclusive, we append below some of the many articles
from various foreign publications, which shed further light into the
camera shy and elusive corporate entities that are Singapore's GLCs,
TLCs and GICs.

------------------------------­------------------------------­--------------

Sat Mar 15, 2003  9:24 pm
Subject:  Investment Singapore style

Investment Singapore style
Asia Times
By Lynette Ong

THE Government of Singapore Investment Corporation (GIC) has enjoyed
much publicity as the tightly-controlled press in Singapore sings
praises for the secret investment society's 20th anniversary this
year.

"The story of the GIC combines all the ingredients of a best-selling
textbook on best business practice - and a bit of a financial
thriller too", says the editorial of the island's business daily.
How much does the cheerleader know about the team it is betting on?
Not a great deal, apart from what is officially released. The GIC was
set up in 1981 to manage the country's foreign reserves which are
said to exceed S$181 billion (US$100 billion) July 19 - one of the
highest in the world - thanks to the country's high savings rates. It
is a private limited company (PLC), wholly owned by the government,
and comes under the purview of the Ministry of Finance.

But it is no ordinary PLC. The law exempts it from filing balance
sheets, profit-and-loss statements, publish annual reports or report
to parliament. It is only accountable to the accountant-general,
auditor-general and the president, to whom it submits its financial
statements and proposed budgets. The special PLC is chaired by the
elder statesman Lee Kuan Yew, while his son, the deputy premier, Lee
Hsien Loong, is the second-in-charge. The GIC's website provides no
clue on its asset allocation or investment returns and only contains
what-an-exciting-organization stuff aiming at attracting young
talents to join the team.

The GIC invests half of its funds in global equities, 30 percent in
bonds, 10 percent in real estate, 5 percent in venture capital funds
and 5 percent in cash instruments. In terms of geographical
distribution, the United States accounts for the bulk of its
investments, while Europe and Asia each takes up a quarter of the
share.

The GIC claims its funds not only outperform global benchmarks such
as the Morgan Stanley Capital World Equities Index, but its real rate
of return always exceeds the G3's (US, Japan and Germany) average
inflation rate of 5 percent. But this still begs the question, why
does it refuse to disclose its returns if the performance is so
spectacular?

The senior minister says the secrecy is to ward off potential
speculative attacks on the Singapore dollar because the foreign
reserves are often used to stabilize the national currency. Or
perhaps the GIC's track record is not all that impressive - for as
much as we know. The GIC was said to be one of the single largest
creditors of China's Guangdong International Trust & Investment
Corporation (GITIC) and it lost about S$200 million when GITIC
collapsed in 1999 with about US$3 billion of debt. In 1996, a GIC
officer was involved in a scandal for accepting S$2.4 million in
bribes offered by a US fund manager to buy shares in various public-
listed companies, although he was later acquitted on appeal. The GIC
was also rumored to be involved in tie-ups with hedge-fund manager
Long-Term Capital Management before its collapse in late 1998.

The GIC's discretion might be for political purposes. It is, after
all, one of the region's largest property owners with assets
including the AT&T Corporate Center in Chicago, 70 Grosvenor Street
in London, the Grand Millennium Plaza in Hong Kong and the
International Broadcast Center in Sydney - home of the Sydney
Olympics. GIC Real Estate - the company's property-investment arm -
is said to have invested in 120 properties in more than 25 countries
worldwide. But the total asset value has not been revealed.

The GIC might be inviting political resistance if it bangs the gong
every time a deal is sealed. Not least in neighboring Malaysia where
it is said to own M$870 million (US$230 million) worth of listed
assets and properties. This is despite its recent disposal of stakes
in Malaysia Pacific Industries (MPI) - part of the Hong Leong
Industries, and Mesiniaga - the distributor of IBM products in the
country. Its largest investment in Malaysia is believed to be the 362
million ringgit stake in Sunway City, a popular theme park and
shopping mall located on the outskirts of the capital Kuala Lumpur.

The GIC is also reported to have stakes in at least another 11
companies listed on the KLSE, including KFC Holdings Malaysia, Star
Publications, the New Straits Times Press, Tanjong, Resorts World,
Berjaya Sports Toto, Public Bank and AMMB Holdings. Have you noticed
the common threads in these investments? The hiccups in Malaysia-
Singapore bilateral relations have been largely over some trivial
matters or sibling rivalries - except the touchy racial issue. It is
no wonder that expansion of Singapore's business empire into these
Chinese-owned companies in Malaysia has gone largely unnoticed.

The GIC is also one of Asia's largest private equity investors, with
an estimated S$9.1 billion-S$18.2 billion invested in 150 private
equity funds worldwide, reports the Straits Times. The company is
said to have scaled down its investments in venture capital funds and
moved into buy-out funds which finance companies undergoing
restructuring to improve performance. This is a high-risk, high-
return category as private-equity investors typically aim for 20
percent annual returns when they sell off stakes in the restructured
companies, says the president of GIC's private equity arm.

The returns of these high-risk investments are as big a mystery as
the organization itself

------------------------------­------------------------------­---------------

Fateha
Date:  Sat Mar 1, 2003  7:16 pm
Subject:  More on GLCs; Singapore's "Giant Loss Making Companies"

NORFOLK (Conneticut): You have to love the sound of SembCorp
Industries Ltd in Singapore. It owns shipyards, an enginnering
company and a net provider called Pacific internet.

It's also a zoo-management company which presumably means it see that
the monkeys and alligators get fed at the island's only zoo - a good
one, actually, and also owned by the Government.

SembCorp is one of about 40 large companies controlled by Temasek
Holdings Pte, which is in turn controlled by the Singapore Government.

The seven biggest of these companies -- telecoms to shipping lines to
the national airline -- account for about a fifth of the Stock
Exchange of Singapore's market capitalisation.

There's a little bit of India in this, with its sprawling state
sector born of the old ideals of Fabian socialism, and there's a
little bit of the old Japan Inc, too.

The main point is there's a lot of Singapore tied up in Temasek -- 60
per cent of the island nation's economy, by the US embassy's count, a
lot less according to Singapore's officials.

Talk of reforming Temasek and getting the government out of business
has been common in Singapore for years. The management is sluggish,
critics say, some bad deals have been made, and it suffers that
distinctly Singaporean malaise, a paucity of imagination and new
thinking that reflects a certain culture of caution and even fear
that anyone who has lived in Singapore knows all about.

Not until lately, however, would anyone dare raise the problem of
conflict of interest at Temasek and its various government-linked
companies, or GLCs, as they are called locally.

Mention of that "N" word was further out of the question. Lately,
however, even Prime Minister Goh Chok Tong is happy to discuss
nepotism, conflicting responsiblities among GLC executives, poor
returns, and all the other problems associated with Temasek.

What jarred the critical stones loose in the wall? It seems to have
been the appointment in May of 49-year-old Ho Ching as Temasek's
executive director. Ho also happens to be the wife of Lee Hsien
Loong, the Deputy Prime Minister and Finance Minister, and that
makes her the daughter-in-law of Senior Minister Lee Kuan Yew.

We can avoid the topic of nepotism now the way one ignores an
elephant in the living room - that seems to have been the calculation
in high places.

The most significant airing of the subject has come by way of a long
story and an interview with Goh by Business Week's Michael Shari.

"Can Singapore Inc fix Singapore Inc?" Shari asks. "Many analysts
insist that only an outsider can break up the cozy corporate culture
of patronage widely blamed for the lethargy of the GLCs.

"Critics note that Temasek directors sit on the boards of
corporations Temasek owns, and that board members of those GLCs sit
on the boards of other GLCs."

It is indeed a tangled web. A well-established corporate executive
named Tan Boon Seng published a comprehensive list of who runs which
GLC and who sits on which board and who is whose cousin or uncle or
brother earlier this year.

The people at {Singapore Window}, a Web site that made the document
public, report only one minor inaccuracy - apparently an error of
omission.

"The story is, we need to expand the pool of people," PM Goh told
Shari in his interview. That's for sure. When Ho was named executive
director, Temasek had to rejig its management structure so she
wouldn't be reporting directly to her husband.

Ho also stepped down as chief executive of Singapore Technologies, a
defence contrator, so she wouldn't in that case be reporting directly
to herself.

There are problems in Temasek, clearly. Nepotism is one, the
interests of Singapore's first family are another, efficiency is a
third, and the role of the government in the economy is the fourth,
and largest.

Two months into Ho's term as executive director, we've already got
some answers.

Nepotism, it seems, is not a problem, or is a problem Singaporeans
must accept, because the Lees are a family whose talents Singapore
cannot do without.

"The perception is there, I concede," Goh told Michael Shari.

"But what do you do? Because of the perception, you don't appoint Lee
Hsien Yang (the deputy PM's brother and chief executive at SingTel,
among other posts)? You don't appoint Ho Ching, and any number of
their relatives in high positions?"

As to conflict of interest, Goh's thought is one articulated often
enough in other circumstances. "It's awkward, we know that," he
said. "There is some conflict of interest, but you know, we work for
the common good."

One must leave these questions to Singaporeans and their political
process, such as it may be. Indeed, Singapore begins to look like a
textbook example of how healthy, balanced development cannot be
understood separately from healthy, balanced democratic
institutions.

The questions of true import, however, are the last two: the
efficiency or otherwise of Singapore's GLCs and the right place for
the state in the island's economy.

On these points, Singapore is in a tough spot. For one thing, the
true change to be effected is in the island's psychology, the way it
stifles creativity and original ideas. For another, it needs to tread
carefully now as it eases out of business - to the extent it intends
to do so, that is.

S. Dhanabalan, a former Foreign Minister and now chairman of Temasek,
has already signalled that, while it might bail out of such things as
zoo management, if anything it is likely to strengthen its hand in
industries judged either strategic, such as banking or telecoms,
perhaps, and those judged risky, such as biotechnology.

I see nothing wrong with this per se. The wreckage of hasty
privatisations is apparent from Mumbai eastward to Jakarta. In every
such failure, the lesson is the same: Ownership is not the core
issue, it's a secondary issue.

The core issues are accountability, effective oversight, and sound
regulation.

Singapore's approach to state control of industry is, by any
reasonable measure, yesterday's thinking, a hangover from another era.

And the question of nepotism, or its perception, as the problem is
now described, cannot be explained away.

But the island-nation should take its time about it.

------------------------------­------------------------------­---------

From:   Henny Sender
Date:  Sat Apr 12, 2003  12:51 am
Subject:  Singapore Invests Globally at a Premium, with No Results

By Henny Sender
The Wall Street Journal
(Copyright (c) 2001, Dow Jones & Company, Inc.)

SINGAPORE -- When government-linked Singapore Telecommunications Ltd.
reached an agreement in March to buy Cable & Wireless Optus of
Australia for $7 billion, the news was greeted with relief at home
and derision elsewhere: Investors decided Singapore had paid too
much, and SingTel's stock plunged.

The same was true this year when Development Bank of Singapore
purchased Dao Heng Bank Group in Hong Kong, shelling out more than
three times book value for a mature, well-run bank. Singapore Inc .
was finally closing deals in its desire to expand beyond the confines
of its 208-square-mile home, but only by laying out substantially
more than others were willing to spend.

The "Singapore premium," as it is now being called, is well
established. For those who believe Singapore is paying too much for
what it is buying, the comparison that comes to mind is the "dumb
money" shelled out by the Japanese in the 1980s. Then, companies
around the world licked their lips when they saw Japanese buyers
coming along with fistfuls of cash.

To judge Singapore Inc .'s investment performance on the basis of
what it pays is to miss the point, some Singaporeans argue. "High-
tech investment is our future," declares Soo Boon Koh, founder of
iglobe Partners, a local venture-capital fund seeded with money from
the Economic Development Board's Technopreneurship Investment
Fund. "We are driven by a sense that we are small and vulnerable,"
says Teo Ming Kian, chairman of the Economic Development Board. "Our
challenge is to figure out how we can be value-added."

Whatever the returns, the scale of Singapore's investments is
certainly of Japanese tsunami proportions. Singapore's government
reserves of $120 billion make it one of the deepest pools of capital
in the world -- and tens of billions of dollars of its money now
sloshes around the world. Both its property arm and its private-
equity arm are among the world's largest.

Singapore has taken stakes in everything from Cisco Systems Inc. and
Citigroup Inc. in the U.S. (in which it is one of the largest
shareholders) to investment bank China International Capital Corp. in
China. It controls real estate from the center of Chicago to the
heart of Tokyo.

Singapore also was part of every one of the three bids when
Indonesia's chief automobile assembler, PT Astra International, was
up for grabs last year; it was an investor in the first U.S. buyout
fund established by Kohlberg Kravis & Roberts in the mid-1980s.

No question, Singapore is in the big leagues of world investment. As
for performance, though, the record is mixed, with frequent missteps
in timing and in targets. Such fears that Singapore may have trouble
managing what it has bought can cost the country big. Last year, for
example, a 50% stake in ASAT Ltd. of Hong Kong was up for sale by its
parent, QPL International Holdings Ltd., which is listed in Hong
Kong. Chase Asia Equity Partners submitted a bid that valued ASAT at
$400 million, while the government-linked Singapore Technologies
group made an offer that valued ASAT at 16% more than Chase's bid.

Yet, the board of QPL rejected the Singaporean offer, fearing slow
decision making and bureaucratic meddling, according to its chairman,
Tong Lok Li.

As for practical shortcomings, consider SingTel's all-cash offer last
year for Cable & Wireless HKT, made after insufficient consultation
with the authorities in either Beijing or Hong Kong. That led to an
embarrassing rejection in favor of Pacific Century CyberWorks Ltd.:
Singapore offered cash instead of PCCW's mixture of cash and high-
priced stock, but lost anyway. Other rejections have been far less
public but no less embarrassing.

"Singapore companies have made decisions that are commercially and
strategically smart," says Michael Berchtold, head of Asian
investment banking for Morgan Stanley & Co. in Hong Kong. "Execution,
though, will determine whether they are winners.


------------------------------­------------------------------­---------

http://groups.yahoo.com/group/­Sg_Review/message/1455

Mellanie Hewlitt
The Truth Behind Singapore's Public Policy Administration
Singapore Review
21 Jan 2005

Government  led "Family Friendly" benefits and "Flexi-work"
arrangements often look good only on paper but find very limited
application outside of the civil service in the real pressure filled
world of private sector firms and MNCs. This was the bitter lesson
learnt by Ms Lim Ai Ling when she attempted to cash-in on her "Family
Friendly Benefits" and instead opened a can of worms. Ms Lim found to
her horror that a "Flexi-work" public policy does not mean flexi-work
arrangements in practise.

Ms Lim's mistake is quite understandable. Many of us assume that public
policies are more than mere rhetoric and take them at face value
especially when they are enthusiastically reported in the local
government owned papers. We mistakingly assume that a "Family Friendly"
public policy translates into more quality time with our loved ones.
But the truth is hard to swallow in Singapore. Few realise that most of
the policies are mere publicity stunts devoid of actual substance and
one relies on them at his or her own peril.

To be fair, many firms and Multinational Companies (MNCs) will endorse
these government led "family friendly" % "flexi-work" packages as part
of their standard employee welfare program. But they are also faced
with budget constraints and the constant pressure of keeping costs down
and achieving a larger workload with the same (or even smaller) number
of workers.

Family Friendly = More Time With Family = Less Time in Office
What the PAP and Singapore's highly paid ministers fail to realize is
that we cannot eat our cake and have it. For every choice made there is
an underlying opportunity cost. Most private sector MNCs have already
optimized workflows and streamlined work protocols so only very little
room is available for further rationalization exercises. In a fast
moving work place like this,  the opportunity cost of implementing a
family friendly work environment translates into;

a) Shorter Work hours;
b) Lighter work loads;
c) Employing more staff to do the same amount of work;
d) Increased labour costs and head-count;
e) And ultimately a less competitive Singapore work force (and
infrastructure).

The logic behind the above is part of Introductory Economics 101;- When
a company is given fixed (and limited labour resource units), if one
factor of production is increased while the others remain constant, the
overall returns will relatively decrease after a certain point.
http://www.encyclopedia.com/ht­ml/d1/diminish.asp

The bottom line is that many department heads, and employers are
unwilling to accept the above costs which will ultimately eat into the
net profit and overall financial performance of a firm. The accepted
norm in Singapore's MNCs is to "over leverage" on fixed labour
resources so that the department is actually operating on the declining
segment of the Total Productivity curve. Needless to say this is an
inefficient allocation or resources as the mix of resource units are
not optimized. But this is of no consequence to most department heads
as their only sole objective (to the exclusion of all else including
worker welfare) is to keep labour costs down.

In this flawed strategy, worker welfare (and Family Friendly Benefits)
are interests that directly conflict with the balancesheet / P&L needs
of the company (and the state).

Unfortunately, the same flawed strategy is adopted by the Singapore
government albeit on a larger scale. On a small island with no natural
resources, the only "resource" which is saleable in order to attract
foreign investments is HUMAN LABOUR.  But if this is the case and the
average worker should be of prime importance to the overall well being
of Singapore Inc, Management should implement more friendly work
policies. Instead, the average worker is exploited and they seem to be
intent on killing the goose that lays the golden egg.

Past examples of the PAP Government's "Family Friendly" policies
include;

1) Cutting Employer's CPF: Implementing across the board wage
reductions (in the form of unilateral cuts to employers CPF
contribution). This was a policy which the PAP government imposed
harshly with the full knowledge that government census figures showed
that most Singaporeans workers are still dependent on CPF contributions
to pay-off their mortgages. See:
http://groups.yahoo.com/group/­Sg_Review/message/618 and also
http://groups.yahoo.com/group/­Sg_Review/message/638

2) No CPF Restoration in Good Times: During a subsequent economic
recovery, this same government did not restore Employers CPF
contributions. The ministers of cause restored their own salaries
(though it was highly questionable if they ever took a wage cut in the
first place. See http://groups.yahoo.com/group/­Sg_Review/message/1234
But the buck literally stopped before it reached the average Singapore
worker.

3) Singapore is a very expensive place to call home. Its ok if you are
just "passing through" as an expat, but the story is different if you
try settling here for good. See:
http://groups.yahoo.com/group/­Sg_Review/message/1074

4) Singapore Workers Over Paid; Inspite of para (3) above, this same
government also came to the rather far-fetched conclusion that
Singapore workers were more well paid than their counterparts in the
US, UK and Australia (see:
http://groups.yahoo.com/group/­Sg_Review/message/577

5) Singapore Workers Cannot Retire: Contrary to the assertions of the
government in para (4) above, it is a fact that Singaporean workers
will not have enough in their savings to retire on. See:
http://groups.yahoo.com/group/­Sg_Review/message/1413

6) State Enterprises Live Off Workers: Decades of huge hidden fiscal
surpluses enrich the Singapore government and state enterprises but
impoverish the private sector and tax payers. See Far Eastern Economic
Review: http://groups.yahoo.com/group/­Sg_Review/message/1153

7) Its a Crime Not To Top-Up CPF; This same government has made a crime
if you do not top-up your CPF. Only in Singapore is it possible to be
taken to court if you owe yourself money. See:
http://groups.yahoo.com/group/­Sg_Review/message/1305

The list goes on and on but for the sake of brevity we will stop here.
From the above mix of policies the overall picture is clear. Actions
speak louder than words. In the grand scheme of things of the PAP
government, there is no place for workers welfare and "Family Friendly
Benefits". Of cause it would be political suicide (even in Singapore)
to publicly admit this truth so in true PAP tradition policies are
drafted and the government controlled press is enlisted to show case to
the public that worker's welfare feature prominently in the ruling
party's priorities.

Of cause the problem here is that there maybe afew kind unsuspecting
souls who actually swallow this entire sales pitch, hook line and
sinker, which brings us bad to the sad story of Ms  Lim Ai Ling.

Then again, with Human Labour as Singapore Inc's only available
product, do you honestly believe that management of Singapore Inc will
endorse policies which will degrade the quality and standard of its
sole product (and life line)? This government's unspoken stand on bread
and butter issues is that the welfare and well being of the average
worker is subordinated by those of the "larger" and more "pressing"
concerns of the state. Like the usual Stalin and Marxist model, the
average Singaporean worker is expected to make sacrifices for the
"larger good" of the state.

This perspective also sits well with the government's current
anti-labour policies which favour labour representation by a sham
labour union (NTUC). The existence of strong and real labour union
representation would not agree with a management strategy which has the
objective of keeping Singapore Inc's sole product price competitive
(i.e.cheap) and attractive. There is a negative correlation between
quality of life and attractiveness of Singapore Inc's prime product.

In order to placate workers, what we get from "Management" of Singapore
Inc are a series of measures which look good on paper but were never
intended to see real actual application in the real work place in the
private sector. This also explains the reason why there is the very
conspicuous absence of any real bona fide labour union representation
here.
see:  http://groups.yahoo.com/group/­Sg_Review/message/1399

With unemployment rates remaining at 4.5% p.a. (which sit strangely
beside reports by the local press of a local economic recovery), the
status quo in the job market is decidedly in favour of the employer.
Unlike other developed countries like the US, UK, Australia etc,
Singapore is not a welfare state, so in the absence of real tangible
labour union representation the employers hold all the cards on the
negotiation table. In view of the current conditions desperate workers
with mortgages to pay are willing to accept lower pay, longer work
hours and more stressful work conditions.

The Singapore government has never been a strong proponent of human
rights (and free speech) so this Stalin/Marxist styled mentality in
public policy administration is also hardly surprising.  However, this
imperfect state of affairs might be easier to accept if Singapore's
Ruling Elite also led by example. But this was not the case as
Singapore's current ministers have conveniently exempt themselves from
the same policies on wage restraint which they cavalierly impose for
the rest of the population.
see:  http://groups.yahoo.com/group/­Sg_Review/message/1373
http://groups.yahoo.com/group/­Sg_Review/message/1360

What happens if the average unsuspecting worker takes the "Family
Friendly" and "Flexi-work" policies of the PAP government at face value
and attempts to actually see these policies through to actual
implementation? Ask Ms Lim Ai Ling who was finally retrenched for all
her efforts.

We circulate below article from Lim Ai Ling which should be read
keeping in mind the overall larger "labour friendly" policy mix of the
Singapore Government. There is more than meets the eye in the shady
world of public policy implementation and there is a lesson to be
learnt in this for all would-be believers.

------------------------------­------------------------------­------------------\
------------­------------------------------­------------------------------­-----\
---

Today
20 Jan 2005
Lim Ai Ling

HERE'S WHY FAMILY-FRIENDLY BENEFITS DON'T FARE WELL HERE
------------------------------­--------------------------
I refer to the report, "Flexi-work arrangements still limited" (Jan
18).

It's not surprising that the family-friendly benefits did not fare well
in Singapore.

I was in the IT line. I had tried to ask my former employer, a big
local company, for a flexi-work deal so I could spend more time with my son.

I asked to work from home, but my request was turned down.

Then I tried asking to work four extended days in a week with one day
off, another proposal that was turned down.

This is unlike in the United States or the United Kingdom, where
employees have been able to persuade employers to let them use the Internet to
work from home, as noted in the News Comment, "From home to work with a
mouse click" (Jan 14).

Finally, I was asked to accept a retrenchment package while I was
pregnant with my second child.

My manager told me it was the best arrangement as, with the money, I
could stay home and look after my kids!

Letter from Lim Ai Ling

--------------------------------------------------------------------------------\
------

From:   Mellanie Hewlitt - Singapore Review
Date:  Mon Feb 24, 2003  6:00 pm
Subject:  Singapore Needs A Little Love, Compassion & Love Potion 99.

Singapore Needs A Little Love and Compassion?

An amusing perception of the Singapore Procreation Process;

Everything runs like clockwork in squeaky clean, efficient little
Singapore. Well, almost everything at least. And what does the Ruling
Elite do if there is a problem in their neat tidy backyard? They
address it by way of laws, fines, taxes, imprisonments and law
suites, this after all is the PAP way. It has worked in the past and
it will always work in the future. But then again perhaps not.

The tiny city state and its ever paternalistic government have a
problem which cannot be solved by the usual cocktail of laws, fines,
litigation and campaigns. This problem is a highly personal one which
extends into the private bedrooms of its citizens. How does a well
meaning parent tell its usually compliant and obedient children
to "get on with it", to "make hay whilst the sun shines" and more
directly put, to "go forth, procreate, multiply and reproduce."?

Along with the status of a developed nation, Singapore has also
inherited its trade mark problems. Its population (particularly the
better educated and wealthier Chinese majority) is not replacing
itself and birth rates have been declining continously over the
years. And this is a problem which the paternalistic government
cannot address in its usual draconian style. No, you cannot impose a
fine, and neither can you pass a law to solve this sensitive issue.
And if left unaddressed, there is every potential that the little
city-state with its population of 4 million people will "develop"
itself to extinction.

The task is growing more urgent because the birth rate among
Singapore's four million people is falling steadily and now
languishes at 1.4 children per woman. That's below the 2.1
demographers say is necessary for a population to replace itself.

In the past, Singapore's ruling elite have approached the problem
with their usual efficiency and diligence, by way of campaigns and
policy implementations. Indeed, their attempt to play cupid had not
gone unnoticed and has been the source of much amusement (see
previous article attached below; "Government Promotes Unions Of Its
Best and Brightest; Soul Mates in 7 Minutes?", The Wallstreet
Journal).

After several failed attempts, the "Powers that be" finally realized
that (at least for matters of the heart, and bedroom type activities)
they cannot point a gun to a person's head and mandate him/her to
kick start the domestic baby making factory. No Mr Lee, it does not
work this way, that's not how Adam and Eve started out, and that's
certainly not how the Good Lord created the universe.

Perhaps one reason for the government's dismal failures is the
overwhelming emphasis on academic qualifications and other "hard
factors". The government set-up two different social units to
encourage marriage amongst the younger generation. One for graduates
(SDU, Singapore's best and brightest?) and one for non-graduates
(SDS). The underlying message of cause was that new generation of
Singaporeans should choose their partners and marry within the
confines of their own designated Academic Caste System. Hence, it is
small wonder why many younger and more liberal minded Singaporeans
find this archaic medieval academic caste system highly objectionable
and terribly unromantic.

Many may also remember the infamous "Graduate Mother Scheme" which
the government tried to implement a decade ago. For those who are
unfamiliar, it would be best described as the PAP's way to implement
their version of the Laws of Un-Natural Selection, and propagate the
ruling elite's own twisted version of the theory of evolution.
Graduate couples were then given huge financial incentives and
support to have more children. The rationale being that children from
graduate couples were more likely to be intelligent and gifted. Of
cause the flip side of the equation logically implied that children
of non-graduate parents were total misfits and genetically inferior!

This measure of the worth of a human life (accessed solely on
academic merits) raised many questioning eyebrows, from graduates and
non-graduates alike. And it came as no surprise that the scheme was a
colossal failure, a heartening reflection that the Singapore
population still retained some semblance of independent thought and
dignity when it comes to matters of the heart at least

But aside from the colossal failures of the government sponsored
match making programs, a host of other factors account for the
declining birth rates. "Go forth and multiply" you say? Well that's
more easily said then done for the average couple in Singapore with
an average household income of approximately SGD3-4000/-. Unless you
are part of the ruling elite who take home a minimum net income of
SGD150,000/- per month (or SGD1.6 million per year), (the average pay
packet for a PAP minister), life is not easy in expensive little
Singapore.

The start-up costs for a new family can be staggering, with big
ticket items like a car and a house. Even a 1.6 Litre Japanese car
will cost at least SGD80,000/-, which is the equivalent of a decent 3
bedroom house in some countries. And a small 1,200 Sq Ft apartment
can set you back SGD1,000,000.- and more, depending on the locality
and tenor. What about government "subsidised" housing?
Well, "subsidised" housing here takes the form of HDB (Housing
Development Board) flats which will cost between SGD200,000 to
SGD400,000/-, the equivalent of a decent size house in Australia or
New Zealand.

And the costs and expenses do not stop here. The government has also
imposed compulsory savings in the form of CPF (Central Provident
Fund), which is mandatory and ties up approx 20% of the monthly pay
of the citizens. There is no access to these funds until you reach
the retirement age of 55 years. And if you fall ill or need a
operation before this age, good luck matey you are on your own. Then
there are the other daily expenses like ERP (Electronic Road
Pricing), maid levies, GST, all of which is imposed in a city state
which is conspicuously bereft of any public welfare or unemployment
benefits.

In short, staggering initial capital outlay required in starting a
family here, as well as increasing costs of living, have paved the
way for dual income households where both husband and wife typically
work 12 hour days just to make ends meet. And after a hectic work
day, there is little time left over for other more "romantic"
pastimes, let alone raising a child.

Even when there is an increase in marriage rates, there is no sure
sign that this would reverse the declining birth rates as the vast
majority of couples either opt not to have children, or in the event
they do, the wealthy and affluent class (which are most targeted by
the Singapore Government) have instead chosen to have children
abroad. One such individual was a banker (who requested to remain
anonymous) who stated that he would want his child to have a normal
and happy childhood, as opposed to the rigid, oppressive and highly
competitive pressure-cooked education system in Singapore. He took a
3 week holiday and arranged for his wife to give birth to their
bouncing baby boy in New York, so that the child had the rights and
benefits of US citizenship. And theirs is not an isolated case as
there are many who have opted for a better and easier life for their
children via this route.

Far from encouraging increasing birth-rates, a combination
of dismal government policies and "social engineering", and
unfavourable work and living conditions (for the locals) have
resulted in an exodus of the more affluent segments of the
population, further worsening an already bad situation.

At the end of the day, the act of procreation is highly intimate and
individualistic, very personal in nature. One really wonders if years
of repressive indoctrination have robbed the native populace of the
free will, independence and ability to rise to the occasion,
instilling an over-dependent, compliant and submissive culture which
is anti-thesis to the aggressive survival instinct that is crucial
for reproduction.

But not withstanding the difficult and oppressive social and
financial environment moulded by the government, surely our fore
fathers and distant ancestors have faced greater challenges in the
past, and still managed to sow their royal oats and ensured the
continued existence of their bloodlines? So what's really missing in
Singapore's Procreation Equation? A liberal dose of good old
fashioned love.

One can almost picture the look of uncomprehending horror on the
faces of the Ruling Elite. How preposterous, marry and procreate in
the name of love? But that would mean breaching the Academic Caste
System! GOOD HAVENS NO! We cant' have people running all over the
place, haphazardly falling in love and procreating, that's wrong!
That's not within the prescribed framework of the nicely laid out
plans Singapore's Ruling Elite had crafted for Singapore Inc.

But some would argue that "letting nature take its own natural
course" is a formulae that has worked for humanity in the last two to
five thousand years. Perhaps its high time some brave hearted martyr
ventures forth and informs the "Powers that be in Singapore" that
they should try a little bit of good old fashioned love (and throw in
the obligatory bouquet of roses) and compassion, if they wished to
play cupid.

Perhaps its also time for the overzealous parent to leave the
children some slack, they are all grown up and they have to figure
this one out for themselves. Alternatively, does anyone have the
recipe for Love Potion No 9. If you do, please mark it URGENT and
forward it to the PAP.

To subscribe, simply send an e-mail to: Sg_Review-subscribe@yahoogroups.com

Critical issues overlooked in HDB’s letter to Straits Times

Written by Ng E-Jay
01 Sept 2009

The ST letter “How HDB keeps it affordable” (31 Aug 2009) penned by Mr Ignatius Lourdesamy, Deputy Director (Marketing & Projects) of HDB, overlooked several critical issues and failed miserably in its attempt to refute claims that public housing has become too expensive for Singaporeans.

Mr Lourdesamy was responding to earlier queries regarding the proliferation of housing agents and sellers demanding exorbitant “Cash Over Valuation” amounts that in effect corner an already tight property market and cause hardship to families purchashing resale HDB flats.

He was also trying to address issues raised by other ST readers who highlighted the fact that public housing has become too highly correlated with private property prices, as exemplified by the HDB resale price index which has surged 35% over the past two years despite the downturn and now stands at an all time high.

In particular, Mr Chew Kim Cheer argued in his ST letter “Squeezed even harder” (22 Aug 2009) that the Government needs to increase supply to prevent property prices from escalating out of control. Mr Chew also urged the Government to review the $8,000 household income ceiling as an eligibility criterion to qualify for subsidized public housing and a discounted HDB loan.

Many of these pertinent points however were sidestepped by Mr Lourdesamy of the HDB who offered little more than the usual platitutes that the HDB is steadily increasing the supply of new flats to meet demand and that HDB aims to make public housing affordable for eligible first-time households by providing them subsidies for new and resale flats.

In the past few years, property prices in Singapore have increased sharply due to huge foreign fund inflows as well as unfettered immigration. The compactness of our property market has also resulted in public housing prices becoming highly correlated with private property prices which has mushroomed despite the downturn because of lack of market regulation.

Clearly the Government has not done enough to ensure that supply keeps up with demand.

The escalation of property prices has also evolved into a mini-bubble that will have to come crashing down one day because there is a limit to how large our population can grow and a limit to how far foreign fund inflows can sustain such an exponential rise in asset prices. If and when this happens, families that purchased property when prices were high will suffer untold financial hardship.

As usual, HDB makes the spurious claim that its subsidies make public housing affordable to first-time home buyers. To begin with, HDB’s subsidies are market subsidies, not cost subsidies. This means that HDB flats are sold to first-time buyers at a discount to the prevailing market rate rather than at a price that is pegged to the construction cost of the flats.

The problem with such a policy is that as general housing prices rise rapidly, the amount that first-time buyers need to fork out to pay for their home rises rapidly in tandem despite the market subsidies.

In effect, the Government has turned public housing into a giant profiteering exercise, by allowing prices to rise at such a fast pace across the board and providing only market subsidies rather than cost subsidies to first time home buyers.

What has happened to the Government’s promise to provide affordable public housing to all citizens?

Mr Lourdesamy of the HDB also quoted statistics which state that first-time households used 21 per cent and 25 per cent of their monthly income to service their loans on new and resale HDB flats respectively in non-mature estates, and that these figures are well below the international affordability benchmark of 30 per cent.

Mr Lourdesamy does not clarify how he obtained the international affordability benchmark of 30 per cent, nor was it apparent why mature estates were excluded from the survey. He also did not clarify whether the figures of 21% and 25% of income used for loan servicing for new and resale HDB flats respectively refer to percentage of gross income or percentage of take home income (excluding CPF contributions).

But more importantly, just because first-time households use only one quarter of their monthly income for housing loan payments does not mean housing is necessarily affordable. These households could still be over-leveraged if their total loan amount is very large compared to their annual income, and they could easily be underwater should housing prices suffer a fall.

Mr Lourdesamy’s statistics also mask that fact that many households are forced to take loans that stretch up to 30 years. With a loan of such lengthy duration, the amount of interest paid is phenomenal, and there are no prizes for guessing who profits from it. Is public housing really affordable as claimed by the Government, or are citizens paying through their nose just to have a home to live in?

Despite the steep rise in property prices over the past few years, the median salary of Singaporeans opting for 3 or 4 room HDB flats has remained more or less stagnant. Coupled with the rapid increase in the general cost of living, how does the Government expect these families to cope if it continues to do so little for them?

High asset prices in Singapore have resulted in a situation where Singaporeans have their liquidity tied up in property, and many are unable to retire with peace of mind as a result. The Government has clearly reneged on its promise of providing affordable housing and a dignified life for born-and-bred citizens.

Is it no wonder then that so many of our best and brightest are opting to migrate in order to escape the gross materalism that has infected our nation and left it soulless?

Singapore Ministers Pay, Legitimised Corruption

With the extended downturn in the recession we see large banks falling,
accompanied with salary cuts and retrenchments in the private sector.

One looming question is whether the pay of Singapore's Million Dollar ministers
(which are supposed to be pegged to private sector salaries of top income
earners) will also see a 50-70% pay-cut?

We think not and circulate an old article which discusses this issue

-----------------------------------------------------------------------------

Singapore Ministers Pay, Legitimised Corruption
Singapore Review, 2 May 2003 (updated May 2005)
By Mellanie Hewlitt

The headlines blared loudly in the 2 May 2003 issues of the Straits Times and
Business Times "Pay cut? Ministers ready to lead by example: DPM", announcing to
the entire world this selfless act of leadership by Singapore's Ruling Elite.

In what appeared to be an initial move to reduce severely inflated salaries, to
more reasonable industry standards, Singapore's Ruling Elite have bowed to
public pressure and hinted at accepting a pay cut.

Or have they?

What exactly does "Leading By Example" mean? Lets try to put some substance
behind those brave words. As of last count, average take home pay of a Singapore
minister was well in excess of SGD100,000/- a month.

The below table puts things back in proper perspective: (these are basic figures
as of July 2000 and did not include last year's pay hikes or other benefits.
Otherwise the updated numbers may well be much larger)

1. Singapore President's Basic Salary US$1,483,000 (SGD$2,373,100)*a year
Singapore Prime Minister's Basic Salary US$1,100,000 (SGD1,958,000) a year
Minister's Basic: US$655,530 to US$819,124 (SGD1,166,844 to SGD1,458,040) a year

2. United States of America President: US$200,000 Vice President: US$181,400
Cabinet Secretaries: US$157,000

3. United Kingdom Prime Minister: US$170,556 Ministers: US$146,299 Senior Civil
Servants: US$262,438

4. Australia Prime Minister: US$137,060 Deputy Prime Minister: US$111,439
Treasurer: US$102,682

5. Hong Kong Chief Executive : US$416,615 Top Civil Servant: US$278,538
Financial Sec: US$315,077

Source: Asian Wall Street Journal July 10 2000 *Singapore President's salary
which was updated in 2005 from the Singapore Straits Times

In relative terms, less then 20% of Singaporeans here have take home salaries
exceeding SGD100,000/- A YEAR.

In stark contrast, BASIC SALARY FOR A MINISTER STARTS AT SGD1,166,844 A YEAR,OR
JUST UNDER SGD100,000 A MONTH.

What these ministers earns in just ONE MONTH exceeds the ANNUAL TAKE HOME
salary of 80% of Singapore's income earning population. Lets not even begin to
compare annual packages which will exceed SGD1 million easily.

With the above numbers and figures now in perspective, it is easier to give
substance to the words "leading by example". Several facts are noteworthy here;

a) That the ministerial salaries are grossly out of proportion, even when
compared with their counterparts in much larger countries (US and UK) who have
far heavier responsibilities.

b) That these salary reductions were long overdue. In the past, such handsome 
remuneration were "justified" on the back of resounding performance. However, 
Singapore's economy has been in the doldrums of a recession for several years 
now (with beginnings reaching as far back as the 1997 Asian economic crisis). 
This economic barometer is a rough measure of performance and implies that 
ministerial salaries were due for review at least 3-4 years ago.

c) That adjustments should be made to bring them back within the industry 
benchmarks. Taking the salary of US vice president as a rule of thumb, the 
percentage for reductions should start at 50% of current pay. Even if a
Singapore minister takes a 50% pay-cut, he would still be earning much more then
the US vice president.

d) The percentage reductions should greater then 50% if the intent is to bring 
the salaries within the perspective of Singapore's domestic scene.

With such inflated figures, it is understandable why the local government
controlled media (Singapore Press Holdings) have taken pains to exclude mention
of actual numbers for the world to see. The numbers would be too glaring and no
amount of window dressing or creative writing could have reconciled these
numbers with a sane figure and restored credibility.

Also relevant is the question whether such highly paid million dollar ministers
can ever relate to the plight of the average man on the street. The remarks of
Mrs Goh Chok Tong, that a SGD600,000/- per annum salary (of NKF CEO) is PEANUTS,
is a harsh reflection of the real mind-sets, priorities and values of
Singapore's million dollar ministers. And it is these same million dollar
elitist bureucrats who will shape and determine public policies which will touch
on the daily lifelihoods of every Singaporean.

http://f5.grp.yahoofs.com/v1/QKgPRJ1g291aUw0Jmjq3RRkrb0ENXaHTGZMyfK4kUL8ok-QJiK5\
xGY1KbdcQm03b-1sjI6V2gQYH8YVi1o6U/Peanuts.jpg

It is unlikely that Singapore's Ruling Elite will accept such huge salary cuts.
Exactly How much and when the ministerial pay-cuts takes effect is not revealed.
Ask any man on the street and 9 out of 10 responses indicate many agree the
current ministerial salaries are grossly inflated, especially in these lean and
difficult times.

Said a long time forumer from an internet political chat group:
"First of all the Ministers are NOT leading on pay cut. Workers' salaries have
been drastically reduced since the beginning of the recession while thousands
have been unemployed. so the Ministers are NOT LEADING. they are only CATCHING
UP. And they have several decades to catch up on."

"Secondly, how much of a pay cut will Ministers take? 10%? 20%? unless its a cut
that will affect their lifestyles, it is merely symbolic and they would still
not know what it feels like to be a normal worker. as such, this is not Leading
by Example. Its just another bogus political propaganda stunt"

A 29 yr old executive who requested to remain anonymous admitted sheepishly ;
"The numbers (ministerial salaries) are a national embarrassment really, because
it reflects the underlying materialistic value systems of Singapore Ministers.
No matter how you look at it, the fact remains that our ministers are money
faced, and these are supposed to be Singapore's leaders, with value systems that
Singaporeans should follow." "It (the ministerial salaries) puts Singapore in a
bad light in the eyes of the world. The rest of Singaporeans really put in an
honest days work for every penny they earn. And the process for review and
approval of the ministerial salaries is also a joke. Imagine sitting on the
board and approving (on White Paper)your own salary increments! Its all a wayang
show".

This also raises the question as to the authenticity of the actual process for
review and approval of cabinet minister's salaries. Who decides on these
numbers? Is there independence and transparency?

Veteran opposition figure J.B. Jeyaretnam on Wednesday, Nov 20, 2002 challenged
Singapore government ministers to take a pay cut to show they understand the
economic hardships faced by the public. And the over-riding concern is that
Singapore's Ruling Elite are unable to appreciate the economic hardship that the
masses face in these tough times.

The growing public resentment comes afew months after PM Goh's careless comments
that "lay-offs were not all bad", drew a backlash from the public with a flood
of e-mails being sent to the foreign press to register public indignation.

It is a revelation that when the "paycuts" were finally effected they amounted
to a miniscule 10% haircut from the massively bloated ministerial salaries.

It is also a revelation that barely a year later (in June 2004) the bloated
ministerial salaries were restored and increased beyond their original levels
even as the rest of Singapore was still struggling in the throes of a recession.
(There were no CPF restorations for the rest of working Singaporeans).

Source Sg_Review group

Singapore Review welcomes honest feedback on this hotly debated topic. You can
Send your comments to the editor:  sg_Review@yahoogroups.com

--------------------------------------------------------------------------------\
-----

From: Julie Rogers
To: Singapore Review
27 October 2004

Does Inequality Make You Sick? S'pore ministers salaries

Hi, I pondered over Catherine Lim's article "PAP and the people: A return of
disaffection?"
(see: http://www.singapore21.org.sg/art_disaffection.html#debate1)

Until recently I knew next to nothing about Singapore so it is a revelation
that my first introduction to this little speck is through various discussions
on the internet about Ministerial Salaries.

Quite frankly I am rather appalled by the fact that ministers in your country
can earn upwards of USD 1 million. Any officer of the state is a
public servant and this was a once noble and honourable calling. In the
civilised world, persons assume this office because they want personally to
contribute to the well being of the country. Self sacrifice and altruism are
essential hallmarks for a public office holder and the minister must be ready
and willing to make these personal sacrifices.

If the heart is not in this noble service, then it will be wasted effort.
Money should not be an issue at all and if it is, then your "elected leaders"
have very ill-placed priorities and are obviously in it for the wrong reasons.

Even if we were to overlook the misplaced financial motives of your ministers,
the sheer gulf in income disparity between ministerial salaries and those of
the working class will create a huge irreconcilable dichord and disenchantment
with any normal voting public. (A valid point in Catherine Lim's article)

But I am told that Singapore is a democracy with elected leaders! So I have to
assume that Singapore must have a very unique "voting public" which is able to
silently and willingly take all this in their stride. Singaporeans should take
note here that Who they vote for and who they elect is a reflection of their
own core value systems and the undeniable fact remains that Singaporeans have
elected a group of Leaders who are eminently pre-occupied with escalating their
on salaries.

I for one will never be able to accept this unequal state of affairs if ever it
was my lot. And thank goodness it isn't for I will never be able to sleep
soundly at nights knowing that the fate, future and well being of my country
are in the hands of a bunch of financially motivated hired mercenaries.

Below is a further write-up of some of the social ills that a huge income
disparity can create. There is an old saying that the most efficient form of
governance is a Monarchy, but this assumes the Monarch has the same priorities
and agenda as the people he rules. Is this the case with Singapore's Monarchy?

I repeat that who you elect is a mirror image of your own core values and
Singaporeans have to ask themselves whether their current leaders who require
million dollar salaries to be in office, have the same value systems as the
voters who elected them.

Lastly, I have also copied in Guniess World of Records to see if this unique
feature of your country will earn it a place in the world record books.

Julie Rogers

------------------------------------------------------

Mellanie Hewlitt
22 Feb 2005
Singapore Review
Million Dollar Mini$terial $alaries - The Rea$on$ Again?

In light of the recent Singapore Budget 2005, we recirculate below discussions
as a comparison to how much singapore's million dollar ministers have
"contributed" to the country.

a) Is there a budget for Singapore's million dollar ministers?
b) Is there accountability and transparency?
c) Who authorises ministerial pay increments and are these approving authorities
once removed from duress and influence?
d) How are these increments justified?
e) If these salaries are performance based how do you measure the performance of
a million dollar minister?
f) Does the general public and voting citizens feel these million dollar
salaries are justified?
g) Where is the dividing line between legitimised corruption and legitimate
million dollar salaries?
h) Do these million dollar ministers have values which represent those of the
average Singaporean?

The list of questions is endless but there are still no convincing answers.
Read on and decide for yourselves.

http://groups.yahoo.com/group/Sg_Review/message/1360

--------------------------------------------------------------------------------

LEGTIMISED CORRUPTION SINGAPORE STYLED. Can't get your bribes? No problem just
pass a bill and make it legal!!!  Approve your own bonuses and salaries!!!

http://forums.delphiforums.com?sammyboymod/messages?msg=1105?.127

Forum:    the Sammyboy.com's Alfresco Coffee Shop ?Forum
Subject:  Truly Out of dis World Salary for Nathan
From:      (QXP)
To:       (ALL)
DateTime: 25/01/2005 19:24:40

At least we now have some exact figures of what our good for nothing
President -perhaps has done nothing good President - is paid to just
make frequent trips overseas for no tangible benefits at the ADDITIONAL
expense of the taxpayers.

Since Nathan is over the civil service retirement age of 55, and having
been a civil servant for his entire working life until being given a
cushy job at SPH, he must be drawing additional pension IN ADDITION to
his President salary.

Boy this must be the best paid Head of State, other than a monarchy, in
the Whole World by several times - President Bush as Head of State and
Head of Government is paid a mere US$400,000, compared to Nathan's
$2,373,100 which is equivalent to US$1,455,889 @ an exchange rate of
US$1 = S$1.63, EXCLUDING his pension.

Nathan's OUT OF THIS WORLD's salary should be seen in the context of
Singapore's GDP of around US$95 Billion as against US GDP of around
US$11 TRILLION, which is more than 115 TIMES larger than S'pore.

Also China's President - who is both Head of State and Head of
Government - starting salary is only S$265 per month or $3180 per year
for running an economy with a GDP in purchasing power terms of nearly
US$6 TRILLION, which is 63 TIMES Singapore's GDP and this would make
Nathan being paid 47014 TIMES the Chinese President's salary on a per
GDP basis.

http://straitstimes.asia1.com.­sg/sub/singapore/story/0,5562,?97613,00...
Jan 26, 2005

House approves increase in President's salary

PARLIAMENT approved an increase in the President's salary and other
changes to the Civil List, which specifies his allowances and
expenditure on the Istana and personal staff, for the fiscal year 2004.

The salary will be revised to $2,373,100, an increase of $247,100 from
the estimated fiscal year 2004 expenditure.

As such, the total expenditure under Class 1 of the Civil List - which
includes the President's salary, entertainment allowance and Acting
President's allowance - will now be $2,492,700.

Minister of State (Finance) Lim Hwee Hua, who outlined the changes, said
the increase was 'in view of the restoration of the cuts in the
President's salary and higher projected bonuses'.

An increase in the expenditure under Class 2 of the list, which is for
payment of staff salaries and other staff- related expenses, was also
approved yesterday.

The additional $48,800 here will go towards the 'higher than anticipated
salary payments', resulting in a total of $2,425,100 being paid to
Istana employees in fiscal year 2004, which runs from April 2004 to the
end of March this year.

Under Class 3 payments, which is for the maintenance of the Istana,
vehicles, utilities and other supplies, $38,000 from the estimated
figure has been shaved off due to savings on these items, bringing the
expenditure on household expenses down to $903,600.

The Class 4 expenditure, to do with the purchase of special services
such as cars and office equipment, was raised by $15,500, bringing the
total amount to $27,000.

The additional funds are for the purchase of a computer server

Sunday, September 6, 2009

Is Lee Kuan Yew more interested in Power, Money or Altruism?

Posted by cy at 11:52 AM ShareThis

DBS Bank and A Series of “Unfortunate Events”?

By Damon Yeo, Business Correspondent

On the same day DBS announced their new CEO, the piece of  news was quickly overshadowed by another which was about how their legal team will be setting itself up to defend a High Court case against the bank. (read article here)

From various reports, it appears that DBS will be arguing that they had made “an obvious clerical mistake” and that any investor should have noticed it. Those investors, of course, included hundreds of elderly and uneducated investors who were clearly led to believe that the High Notes 5 investments that they had purchased from the bank were relatively risk-free.

This case is perhaps the most interesting civil case in Singapore since the NKF saga and it will be interesting to see how the High Court will eventually rule, bearing in mind that MM Lee had already openly reprimanded these investors.

This however, is not the bank’s first brush with bad publicity. In fact, over the years, DBS had often been in the spotlight for a series of unsavoury incidents.

Arguably, the biggest blunder of them all was in November 1998, when DBS acquired POSBank for S$1.6bn. At that time, DBS claimed that this acquisition will generate economies of scales provide impetus for the bank to become a bigger player in the regional stage. (read report here)

Before being bought by DBS, POSBank was a statutory board of the government and their primary mission was to encourage savings amongst Singaporeans and help the man-on-the-street. (read article here) Profit-making was secondary.

It all changed when DBS came in. Hundreds of thousands of savers lost their tax exemptions on interest earned and in 2000, much to the furore of the Singaporeans from the lower-income group, POSBank introduced monthly service fees for small accounts. Out goes POSBank’s image as warm and friendly organisation.

DBS’s rivals also questioned why POSBank was never up for bid in the first place. A quick check on DBS’s ownership tells it all - government-linked Temasek Holdings was a significant long-time shareholder of the bank.

For DBS, the acquisition was no all sweet too. During the early days of the acquisition, DBS was undecided on keeping the POSBank franchise or merging it altogether into the DBS name.

In 2001, they decided to spend S$1million to rejuvenate the POSBank brand name, but in 2002, announced that the POSB franchise was bleeding $44million a year. The dual network of branches and ATMS, a legacy of the transfer, is still evident today, 11 years on. Definitely not a win-win merger, one has to say.

In June 2002, a Chinese national and a simple computer virus caused the bank much embarrassment.  30-year-old Sun Rong used a Trojan program and made off with $62,000 from 21 DBS accounts. He had no accomplices and left the country before DBS even noticed that their “cyber vault” had been broken into. Just for the record, Sun was never apprehended.

About two years later, DBS upped their ante and caused themselves further pain overseas. In an ultimate blunder, 83 safe deposit boxes from branch in Hong Kong were dumped and crushed at a scrap yard. (read article here)

The bank realised the error only after customers raised the alarms over the missing boxes. A full apology to the customers did not come after two working days later. The bank later admitted that a lack of oversight and clear orders lack to the debacle, but insisted that customers had signed contracts freeing the bank of liability for any damages to the items placed in safety boxes. 

In December last year, DBS drew flak from the some members of the public when they selected Focus on the Family as its charity. (read article here)

This particular charity is not only Christian, but has taken up a strong anti-abortion and anti-homosexuality stance. This move by DBS was not just distasteful, but had also alienated customers who have different religious and sexuality beliefs.

Earlier this year, DBS got itself into yet another PR disaster, when it publicly rebuked one of its employees, Ms Josie Lau, for taking on top post at Aware, a fully volunteer group advocating woman rights. (read article here)

The public reacted angrily to the bank’s reaction, as the position which Ms Lau was taking up was a prestigious role in the local community. Some high-ranking Human Resources personnel from other multinational corporations went as far as to saying that DBS should be proud that someone from the bank wants to take up the position.

On the business side of things, DBS has no doubt been strong. Ever expanding into various markets in Asia, staying out of trouble in the sub-prime debacle and steadily stream of profits are evidence of the bank’s success in this aspect.

Perhaps, time is now for DBS to look beyond their shareholders and focus on their other stakeholders – their customers and their employees.

About the Author:

Damon is a proud graduate of Nanyang Technological University in 2004 with a degree in Accountancy. He is currently working in the finance department of a UK Bank. He is also a regular contributor at redsports.sg.

Dr Chee defiant to the end after being convicted on charges of speaking without a permit

From our Correspondent

The Secretary-General of the Singapore’s Democratic Party (SDP), Dr Chee Soon Juan was convicted on two counts of speaking without a permit during the 2006 elections by a district court last Friday.

Judge Thian Yee Sze imposed a fine of $10,000 or 10 weeks imprisonment in default. As Dr Chee is a bankrupt and unlikely to afford the hefty fine, he may have to go to jail.

Dr Chee is charged with eight counts of speaking in public under the Public Entertainment and Meetings Act.

Defending himself, Dr Chee quoted Article 14 of the Singapore Constitution to argue that it is his fundamental right as a citizen to enjoy the “freedom of speech and expression”.

Dr Chee said:

“This Constitution was written and promulgated when we wrestled our country back from the British colonial government. It wasn’t just a flight of fancy on the part of the framers of the constitution when it was written. Every word was scrutinised and considered before its inclusion in the document.

In other words, the Article 14 was written in to ensure that we, as a people, would be able to fully partake of our freedoms of speech and assembly. We were guaranteed these basic political and civil rights that enable us as free individuals to choose our own government instead of having to rely on and be subject to the rule of another sovereign.”

Dr Chee also used a quote by the former Chief Justice of India Mr P N Bhagwatie to remind the judge that “it is the solemn function of the judiciary to ensure that no constitutional or legal functionary or authority acts beyond the limits of its power nor there that be any abuse of misuse of power.”

It was apparent that the judge did not share the views of Dr Chee as she proceeded to convict him.

Dr Chee’s latest run-in with the law is unlikely to endear him to Singaporeans who are largely ignorant of their fundamental rights as guaranteed under the Constitution of Singapore. Few are aware of the existence of Article 14.

The ruling party of Singapore introduced a series of repressive laws over the years to curtail civil rights and liberties on filmsy grounds of public “order and security.”

Singaporeans are not permitted to speak or protest at anywhere else other than the designated Speakers’ Corner at Hong Lim Park where the police installed CCTVs lately to monitor the activities held there.

Few Singaporeans have protested against its draconian rule after years of dazzling economic growth had made the island state once of the richest countries in the world.

Singapore’s leaders have constantly argued that the “western model of democracy” is not suitable for Singapore which needs a “strong” government (an euphemism for ‘one-party’ state under the PAP) to ensure political stability and social harmoney without which foreign investors will be scared away.

MM Lee, the country’s founder who still wields tremendous influence behind the scene frequently warned Singaporeans that a change of government will lead to a collapse of the economy and the local women becoming “maids” in other countries.

In a recent speech last week, he stressed again that an opposition government will deplete Singapore’s reserves within 5 years not withstanding the fact that his government had already lost a substantial portion of the reserves in less than a year.

Read rest of Dr Chee’s submission here:

http://yoursdp.org/index.php/news/singapore/2759-judge-fines-chee-soon-juan-10000-for-speaking-in-public

Related article:

>> Chee Soon Juan invites George Yeo to online debate

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Temasek to suffer heavy loss from sale of Chartered Semiconductor to Abu Dhabi’s ATIC

From our Correspondent

Singapore’s semiconductor industry had floundered in recent years with mounting losses caused by reduced demand and intense competition from Taiwanese and U.S. chipmakers, a situation exacerbated by the global financial crisis.

Once the crown jewel of Singapore inc, Chartered Semiconductor has struggled to make a profit in the last two years.

Chartered Semiconductor was created in 1987 as a venture that included Singapore Technologies Engineering Ltd., another state-linked company owned by Temasek Holdings.

When its shares were first floated in the market in 1999, IPO price was USD $20 10 years later, it is worth only USD$1.86 per share. (Source: Money Central) At current prices, Temasek may lose up to S$16 billion dollars from the deal. (also read here)

Advanced Technology Investment Co., an investment company owned by Abu Dhabi, will pay S$2.68 ($1.86) a share in cash for Chartered Semiconductor. It will spend a total of S$2.5 billion to buy Temasek’s stake of 62 per cent or 930 million shares in the company.

In Monday’s statement, the companies said Temasek fully supports the acquisition by ATIC and will vote in support of the transaction.

Abu Dhabi plans to combine Chartered Semiconductors with Globalfoundries Inc., a venture ATIC created with Advanced Micro Devices Inc. last year.

Temasek will be relieved to be rid of an unprofitable company which is encountering difficulties to keep itself afloat. In January this year, Chartered Semiconductors retrenched 600 workers in Singapore. (Source: CNA)

Chartered Semiconductor today also raised its third-quarter forecasts for revenue and earnings. Revenue will range from S$405 million to S$415 million, up from a forecast of S$382 million to S$394 million, according to a statement.

The company now anticipates results to range from a net loss of S$8 million to breakeven, an improvement from a loss of S$27 million to S$17 million. Chartered Semiconductor has reported losses in the previous four quarters.

Globalfoundries Chief Executive Officer Doug Grose will run the combined operations, ATIC said. Chartered Semiconductor CEO Chia Song Hwee will be chief operating officer and will be in charge of integrating the operations.

Ironically, Mr Chia said that Chartered has a chance of breaking even in the third quarter ending Sept. 30, noting that the company has upgraded its outlook for the period amid improving market conditions.

Globalfoundries has been facing an uphill battle against No. 1 player Taiwan Semiconductor Manufacturing Co. and second-ranked United Microelectronics Corp., both of Taiwan. It currently has just one manufacturing base in Dresden, Germany, and has a weak client base with just AMD as its primary customer.

By adding Chartered, analysts said Globalfoundries would gain access to a broader set of clients like Broadcom Corp. and Qualcomm Inc., and position itself for growth with a US$4.2 billion plant in New York state that could be fully ramped up within as early as three years.

This may very well put Globalfoundries in a position to pose a legitimate threat to TSMC and UMC in the contract chip manufacturing market later down the road. (Source: WSJ)

The semiconductor industry was once touted as a key industry for Singapore in the 1990s as it shifted away from low-cost manufacturing and electronics industry to high-end technologies.

It was not known how much money the Singapore government had invested initially to set up Chartered Semiconductor’s operations.

Despite a good start, Chartered Semiconductor soon find itself up against larger players in a field dominated by Taiwanese chipmakers.

Temasek’s exit from Chartered Semiconductor will mark the dawn of the semiconductor industry in Singapore and yet another blemish on its record under the leadership of Ho Ching after Shin Corp, ABC Learning, Merrill Lynch and Barclays Bank.

Related articles:

>> Abu Dhabi to buy Chartered Semiconductor

>> How Norway manages its Sovereign Wealth Fund by Fang Zhi Yuan

>> Temasek’s spin doctors at Straits Times try to salvage battered image

>> Temasek outperforms? by Edmund Khor

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How the government keeps HDB prices artifically high

By Eugene Yeo and Jeremy Koh

Introduction

Over 85% of Singapore’s population lives in public housing built by the Housing Development Board (HDB) of Singapore.

Originally built to provide cheap and affordable housing for Singaporeans, the prices of HDB flats have ballooned in the last decade, with HDB resale prices rising 1.4 per cent in the second quarter to a record high.

According to National Development Minister Mah Bow Tan, the flat prices will probably continue to go up, but they will remain affordable to Singaporeans.

While the prices of private properties had dropped by as much as 40% at the beginning of year due to the global financial turmoil, HDB prices remain strong on the whole and even pick up after the first quarter.

How is possible to have a inflationary public housing market in the midst of an economic recession?

One reason lies in the fact that HDB has a complete monopoly over the building of public housing in Singapore. By controlling the supply of new flats, HDB is able to keep the demand constantly high and therefore popping up the prices.

The second reason is because a HDB flat is a basic necessity in land-scarce Singapore. Unlike in larger countries like Malaysia and Thailand where one can go off to live in the rural areas, there is literally nowhere to turn to in Singapore. Therefore there will always be a demand for HDB flats.

The government has managed to keep the prices of new and resale HDB flats high by tweaking its supply and demand at both ends.

Supply

Since all public housing in Singapore is built by the HDB, it is in the ideal position to keep its prices high by restricting its supply.

During the 1970s to 1990s, HDB built an average of 25,000 flats a year. However, from 2000 onwards, the number drop to around 10,000 a year and eventually less than 7,000.

For FY 2004/2005, 6,164 flats were completed. The number dropped by 29% to 4,378 the following year. (Source: HDB)

Common sense will tell us that when the supply is limited in the face of a constant demand, prices will surely go up.

No reasons were given by HDB for reducing the number of flats though demand was increasing with rising numbers of PRs.

Demand

As we mentioned earlier, there will always be a demand for HDB flats and this is kept constantly high by the relentless influx of foreigners.

In a bid to boost the country’s population, the Singapore government is liberal in granting permanent residency status to foreigners. PRs are allowed to purchase resale HDB flats in Singapore.

Since they are usually equipped with decent jobs in the first place, they can easily afford the resale flats, thereby causing its prices to continue going up.

At the same time, the economic crisis also forced some Singaporeans to sell off their private properties and downgrade to HDB flats.

Without large numbers of PRs supporting the resale market, it will probably have stagnated or crash.

Pegging prices of new flats to resale flats

The prices of new HDB flats are pegged to 70% of the prices of resale flats in the same vicinity which is baffling as they are supposed to be highly subsidized public housing.

With the prices of resale flats rising, it is inevitable that prices of new flats will follow suit.

So long as the government keeps the resale prices high, HDB can guarantee a good price for its new flats at above market rates.

Even then, HDB can easily reduce the prices of new flats by adjusting the percentage of pegging.

The ball is in government’s courts

Left alone to market forces which are manipulated by the government to keep property prices high, the price of new and resale flats will continue to increase till it cannot be supported anymore - a classic property bubble in formation.

All HDB needs to do is to increase the number of completed projects a year. As prices of new flats drop, the attractiveness of resale flats will diminish and a downward pressure will be exerted on its prices.

The government can also decrease the demand for HDB flats by limiting the number of PRs allowed to purchase public housing in a year.

Till now, the government seems contented to allow the prices to go up though it has recently announced that land sales will resume by next year which is more of a temporalizing measure to cool the over-heated market rather than to bring the prices now.

Why is the government so keen to keep the prices of HDB flats high? Because there will be serious political and economic repercussions for them if the market crashes.

[Find out more in the second part of our article.]

Tuesday, September 08, 2009

Chartered Semicon SOLD!

I'm glad Temasek has finally decided to sell this perpetually bleeding company. However, the headlines on Straits Times about Abu Dhabi offering $5.6B is puzzling. I first read about the Abu Dhabi's offer yesterday and the newsflash was Abu Dhabi buying Chartered Semiconductor for US$1.8B[Link] that is roughly S$2.5B. So how to explain the discrepancy? If you read the Straits Times article, you will realise they totaled up Chartered massive debt of S$3.1B and Abu Dhabi's offer price of S$2.5B to get $5.6B. I don't ever remember reading a financial article which presents a takeover offer price that included the company's debt. The article makes no mention of Temasek losses and how much Temasek has pumped into the company to keep it a float - each of the 5 semiconductor fab (plant) costs $2B to $4B to build. Chartered Semicon was always playing catchup with the Taiwanese players. TSMC and UMC.

The macro factors behind the Housing Crisis in Singapore

By Abdul Gafoor, Social Correspondent

Many Singaporeans have grown to agree and accept that the housing market in Singapore is in a crisis.

In a country of 600 sq km, where rental property is not quite an affordable option for majority of locals, purchasing a property has become not just desirable but a must.

Therefore this begs a close view of the macro factors that are behind the housing market crisis in Singapore

Wrong supply curve provided by the government

One of the main factors for the housing crisis in Singapore is the large number of buyers who have very poor purchasing capacity and are totally reliant on government for subsidy grants and subsidized loans.

If the government is to stop all subsidy grants and loans, the housing crisis will be doubly worse. That is why the government’s definition of affordability does not match that of the people.

What the government needs to do is to supply houses at the volumes and price levels at which people can buy without relying on subsidy grants and subsidized loans, which is the natural purchasing power rate of people and which is the real demand level.

Subsidy grants and subsidized loans do not improve affordability

Another chief factor that has brought the housing market into the crisis is the subsidy grants and subsidized loans.

What the government is trying to do is to create a superficial sense of affordability with the subsidized loans and grants but that actually erodes the affordability for all the rest as illustrated below.

A person on $5,000 income and $4, 000 take home income, probably has a maximum capacity to pay $2,000 mortgage using CPF and cash. However he may not have the means to pay $50K deposit for a $500K house, especially if he is only having worked for a few years. But with a subsidy grant, he can afford the deposit and hence the house.

In fact he may actually not afford $2,000 mortgage given high cost of living in Singapore where he needs money for other household expenses. But with a subsidized loan, he can afford it.

As a house seller, knowing that the buyer can afford $500K with all the subsidy grant and loan, why should I ask for a price of $400K. I can push it up to $500K.

Other house sellers (being Singapore) will follow suit and the buyer will have to offer me around there. After the first few buyers, HDB will push up valuation to $500K.

This impact of subsidy grants and subsidized loans pushing up prices and reducing affordability has been true not just in Singapore but every city around the world (though there are very few because other governments know this better as they are more wise).

Poor management skills: using rigid rules to achieve noble outcomes

The government may have been excellent as a third world country but it totally lacks the skills for a first world country. Its lack of management skills is another main factor behind the housing market crisis.

There are many noble outcomes that the government hopes to achieve with its million rules for the housing market. However the means that it uses which is the rules are too rigid, inflexible for a housing market that is so dynamic in terms of socio-economic factors and demographics.

Firstly the government uses the “kiasu” approach to rule making which is creating barriers instead of opportunities. For instance in the issue of creating 3 room housing for lower income, an opportunity based approach will involve identifying which applicants require help and could only afford 3 rooms.

Instead they use the rule based approach which basically set outs rules that prevent certain families from qualifying but a good proportion of those families genuinely can require that help to get 3 rooms. What has become so clear is that the government rarely achieves its desired outcomes with its rigid rules.

Conflicting objectives: profit maximization and affordable prices

Another key reason  why the housing market in Singapore is in a crisis the conflicting objectives of the government.

When PAP’s public housing program started off in the 1960s, it was chiefly provision of affordable housing. However in recent two decades, it also has adopted the objective of maximizing profits.

It does not take too much arguments for one to realize that these two are contradicting and conflicting objectives. The government can only have one, not both.

Indeed today we see the government making a handsome amount of money in public housing whereas prices are no longer affordable. The sacrifice of the objective of profit maximization is a fair one.

Firstly it does not mean the government will be loss running in providing public housing. Secondly the government can gain in so many other ways if its population can comfortably live in affordable housing.

Addendum by editor:

[It was announced lately that BBR Holdings has secured a S$104.2-million contract from the Housing & Development Board (HDB) to build seven blocks of flats in Yishun Neighbourhood 4. The work comprises 864 homes, a Child Care Centre, a roof garden, communal amenities and site works, as well as contingency works. (Channel News Asia, 17 August 2009)

Financial Consultant Mr Leong Sze Hian calculated that HDB may make a profit of more than $170,000 for each flat sold upon completion:

"Since there will be 864 HDB flats, the average cost per flat, inclusive of communal amenities, site works and contingency works, is about $120,602 ($104.2 million divided by 864 flats).

With the latest HDB new 4-room flats at Punggol (Punggol Residences BTO) selling at an average price of $293,000 (price range of $264,000 to $322,000 divided by 2), does it mean that the HDB stands to make a profit of about $172,398 per flat, or a profit margin of about 143 per cent?"]

[Source: Hardwarezone]

About the Author:

Abdul Gafoor is a young married researcher working in UK after leaving Singapore . He hopes to return someday to the Singapore he knew as a teenager.

Related articles:

>> Drawbacks of using STIR as a bench mark to assess housing affordability

>> HDB flats will be “severely unaffordable using the Median Multiple as a benchmark for housing affordability”

>> Part 1: Singaporeans do not own their HDB flats

>> Part 2: HDB flats are unaffordable to most Singaporeans

>> Part 3: Rising prices of HDB flats does not create wealth

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Sunday Times’ publicity blitz for the PAP failed to mention the prolonged detention of Barisan MPs without trial

From our Correspondent

It was supposed to be an “objective” and “non-partisan” insider account of the early days of the ruling PAP of Singapore, but it turns out to be yet another piece of subtle propaganda by the regime to remind the restless populace of its glorious past.

The Sunday Times saw fit to publish 7 articles to give the PAP a timely PR boost using excerpts from soon-to-be released SPH publication - “Man in White: The Untold Story of the PAP” on top of the 6 whole pages it earlier published in the day before.

The articles recounted the sacrifices made by the first generation of PAP leaders such as Lee Kuan Yew, Goh Keng Swee, Toh Chin Chye, S Rajaratnam etc. in their struggle first to achieve self-government for Singapore and then to form a government which was clean and capable.

There were interviews with the “leftist” members of the PAP such as Fong Swee Suan who recalled his horrific experience of being interrogated day and night for six months when he was detained without trial under Operation Coldstore launched by the PAP government in 1963 to “pre-empt the communist united front from mounting any violence or creating any disorder in the closing stages of the establishment of Malaysia”, in the words of PAP Chairman Toh Chin Chye.

Other than Fong, the big names caught in the dragnet were Barisan CEC members Lim Chin Siong, Lim Hock Siew and Poh Soo Kai, and unionists S. Woodhull, James Puthucheary, Jamit Singh and Lim Shee Ping. In all, 113 people were rounded up, including 24 Barisan members, 21 trade union leaders, 17 Nanyang University (Nantah) students and graduates, seven members of rural associations, and five journalists.

What was not mentioned is the chilling fact that three of the detainees were detained without trial for more than 15 years - Chia Thye Poh was released only in 1998 after 32 years of incarceration, Dr Lim Hock Siew was detained for 19 years and Said Zahari for 17 years.

Chia Thye Poh, a Barisan MP elected by the people into Parliament was detained longer than former South African President Nelson Mandela (28 years) and prominent Chinese dissident Wei Jingsheng (15 years).

How a first world country which proclaimed itself to be a democracy can perpetuate such injustices on its own citizens is anyone’s guess.

Till today, there is still no concrete evidence that these Barisan members including its de facto leader, the charismatic Lim Chin Siong are communists. The Secretary-General of the Malayan Communist Party (MCP) Chin Peng revealed in his memoirs lately though there were contacts with Lim Chin Siong, he was never a registered member of the MCP.

Operation Coldstore crippled the opposition Barisan Sosialist with the arrest of several of its key leaders. It won only 13 out of 51 seats in the 1964 [RH:  1963 GE, not 1964 and Barisan won 43 out of 51 seats but LIE KY ordered a 6-hour power blackout, cleared the counting halls in the City Hall vote counting centre and faked the votes to win a landslide win instead of the true landslide defeat] General Elections though it was expected to win easily. The PAP managed to form the government with only 47% of the valid votes.

Barisan Sosialist boycotted the 1968 elections and allowed to the PAP to make a clean sweep of all the seats. There was not to be another opposition MP in Parliament until 1981 when J.B. Jeyaretnam won the Anson seat.

The dramatic capitulation of Barisan Sosialist led eventually to the emergence of a one-party state in Singapore. During the crucial years between 1968 and 1981 when there were no opposition in Parliament, the PAP moved in to exert control over all the major institutions in Singapore including the mass media, trade unions, universities and NGOs resulting in the present scenario we have today.

In 1980, Barisan Sosialist Chairman Lee Siew Choh apologized to the voters for the fateful mistake he made in withdrawing Barisan from the electoral process. The Barisan were to eventually merge with the Workers’ Party in 1988.

Instead of dwelling on the past achievements of the PAP, which had been repeated ad nauseum by the regime for the last 50 years, the book should focus more on the failings of the PAP and the glaring flaws in our political system.

Singapore did not have a “strong” one-party government by choice. It was a historical aberation caused by the use of the ISA to cripple the opposition and Barisan’s tragic mistake of boycotting the 1968 elections. Had the Barisan remained in Parliament, Singapore would have a two-party system today.

As Singapore celebrated its 44th National Day, we should not forget these unsung heroes who had fought for Singapore’s independence as well such as Lim Chin Siong, Fong Swee Suan, Chia Thye Poh, Dr Lim Hock Siew, Said Zahari and many others.

Despite their political differences with the PAP, they were willing to stand firm and fight for their political beliefs, sacrificing their freedom in return. They were offered to be released from detention as long they signed a declaration admitting their links with the communists and renouncing the use of violence to overthrow the PAP, but they never did because it was not true in the first place.

How many of our present leaders in both the PAP and opposition have even half the courage, passion, determination of spirit of these supposedly “leftists” who were placed in solitary confinement, interrogated for long periods by their captors and separated from their loved ones for so many years? They could have easily succumbed to political pressure and gave up their struggle, but they pressed on. Even Lee Kuan Yew could not do anything to them and they were eventually released.

The tragedy of Chia Thye Poh is also a collective tragedy of Singapore. After he was released, he was a largely forgotten man. Few in Singapore even heard of his existence.

While the tormentors of Nelson Mandela, Aung San Suu Kyi, Kim Dae Jung and Anwar Ibrahim were roundly condemned, ridiculed and criticized by the international community, the PAP was able to get away with its act scot-free without a blotch on their reputation [RH:  thanks to British and American support for their puppet, to this day]. It is time we keep their legacy alive for future generations: let not the tribulations of these pioneers be in vain.

Related articles:

>> Exposing the fallacy in PM Lee’s ‘ideal’ form of governance

>> Debunking the myths of the PAP system by Fang Zhi Yuan

>> How Singapore managed to lose its opposition over the years by Eugene Yeo

Malaysians ridiculed Zainuddin for bashing Singapore while local netizens sniggered

From our Correspondent

While many Singapore netizens were nonchalant about Utusan Melayu columnist Zainuddin’s criticisms of Singapore as a “third world democracy” a few days ago with some even corroborating his claims,  Malaysian netizens poured scorn on Zainuddin for bashing Singapore.

Mr Zainuddin had said that although Singapore is more advanced than Malaysia, the Republic does not enjoy the same freedom: “Singapore sticks to a Third World democracy despite having a developed world mentality, while Malaysia has a Third World mentality but a developed world democracy.” (read report here)

The response from Singaporeans over this perceived snide from their neighbors up north was surprisingly mute both in cyberspace and reality. Only one letter was sent to the Straits Times Forum by a Jeffrey Law on Saturday criticizing Zainuddin. (though we will probably see more letters from ghost writers writing in support of Singapore next week.)

At the popular Sammyboy Forum, few forumers have jumped to the defence of Singapore.

Wrote JinGanKor:

“Say us 3rd world democracy hohoho, is the old man going to sue them?….If he dare not sue, means Mr Zainuddin is right.”

Nice-Gook supported Zainuddin’s views of Singapore:

“Absolutely true. Their politicians were detained under ISD too, but are still in politics after their stint. Lim Kit Siang and his son Lim Guan Eng the current CM of Penang are good examples. Even Mahathir did his time under ISD. Can anyone cite any politicians in Singapore back in politics after their term of service under ISA?”

Teekee added that Singapore is ranked 82th on the World’s Democracy Index: “Even Albania is better than us….I feel so ashamed!” (read all comments here)

On the other hand, the Malaysian netizens are strongly critical of Zainuddin’s outburst against Singapore.

Belachan57, who started the discussion on the internet edition of Malaysian paper “The Star” wrote:

“I could help but be amused by another one of those politicians bashing our neighbor from across the causeway in the unreliable Utusan paper. Envious because they are far better then us or  a case of diversion over our own intolerance.Let’s be realistic. Our neighbor broke off from us with nothing but a port to it’s name whilst we are left with an abundance of natural resources!”

Victorchew46 added:

“The bigger joke is we are bashing a neighbour that does us no harm except to show us that they can utilize limited resources better and that they accept our “rejects” (highly intelligent people with great skills). Whereas, another neighbour is throwing rotten eggs at our embassy, protesting and planning to go to ‘war’ with us by asking for volunteers to sign up (reminds me of Confrontation days) over a song and a dance and they are not even scorned at!”

woody_invisible was sure who is the better country:

“That ‘Not-So-Trustable’ daily, don’t even read from the paper, let alone believe in them. And there still are stupid dogs who keep on harping on our neighbouring country, while many of our Malaysians HAVE to go down south to ‘EARN BETTER WAGES’. If we are better than the neighbours, why can’t it be the other way round?”

Though most comments are in support of Singapore, there was one netizen with the moniker “frodonet” who posted numerous comments to disparage Singapore.

He was scathing in his criticism of Singapore:

“If you say Singapore is a first world nation, i tell u this :

1) A first world nation will have a freedom of speech which Singapore has none like ROTI NAN!

2) A first world nation will have a pension system which Singapore has NONE but instead CPF is like you won’t be getting it at all.

3) A first world nation would have free universal healthcare service which Singapore has NONE

4) A first world nation will have free/affordable cheap education but Singapore it is SO EXPENSIVE!

5) A first world nation, would take care of it old citizens, in Singapore they want to build a hospice in jb just to cut cost..funny ?

6) A first world nation is where its’ leaders would not declare or raise their own pay until become the world’s highest.

7) A first world nation is where employees are protected but in Sg employees are exploited.

A first world nation is where it’s sportsmen are of it’s own breed..singapore only good at hiring foreigners and change their citizenship…tak malu! u may win the game but never win the respect..

Singapore is NOT A FIRST WORLD NATION. It is self declared.”

[Source: The Star]

It won’t be a surprise at all if frodonet turns out to be a Singaporean.

Related articles:

>> MM Lee accused of “sowing poison” by Malaysian paper

>> Performance of Malaysian opposition states repudiates scarce tactics of MM Lee by Fang Zhi Yuan and Lim Siow Kuan

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Singaporeans snapped up Trevista units by NTUC Choice homes

From our Correspondent

Fueled partly by the relentless media spin, Singaporeans are still flocking to new property launches despite the uncertain economic outlook ahead.

The reports carried by the state media last week about the record prices of HDB resale flats and Minister of National Development Mah Bow Tan’s assertation they will continue to rise is likely to heighten the positive sentiments on the ground.

Over the weekend, NTUC Choice Homes sold another 50 units of its new project at Toa Payoh - Trevista, bringing the total number of units sold to 460.

The remaining units at the 99-year 590-unit condo are mainly larger ones. Most of the unsold units at the 99-year leasehold project are the three- and four-bedroom units.

The 39-storey condo was previewed at an average price of $898 per sq ft. At that time, the three- and four-bedroom units averaged $1.065 million and $1.43 million respectively, under the normal payment scheme.

Now, the remaining three-bedders are priced from $1.008 million. They cost $884 psf to $1,050 psf. The four-bedders are priced from $850 psf to $964 psf, or from $1.448 million.

The prices are slightly less than the Centro, a 99-year project at Ang Mo Kio launched last month at record prices of between $1,100 and $1,200 psf.

With this price, one can get a 3-storey clustered or terraced house in the surburds. Resale clustered houses at Upper Serangoon and Gerald Drive fetched between S$1.3 million and S$1.5 million dollars in caveats lodged recently.

The prices of the mass market homes are popped up by a buoyant HDB resale market which is turn kept artificially high by a limited supply of new flats built by HDB and increase numbers of purchases by PRs.

The developer of Trevista is NTUC Choice homes, which was set up in 2007 to “help more Singaporeans meet their aspirations of owning private property by delivering quality housing at FAIR and AFFORDABLE prices”.

NTUC has branched out into different sectors in the last few years such as property, pharmaceutical, food court chains and even the coffin business.

SMEs and small retail shops have difficulties competing with the giant cooperative which has its finger in literally every industry and business in Singapore from insurance, childcare, taxis, healthcare to property.

While it is allowed to function autonomously as a corporate firm, NTUC remained tightly controlled by the ruling PAP of Singapore.

The Secretary-General of NTUC is almost always a PAP minister. The current position is filled by Mr Lim Swee Say, Minister in the Prime Minister’s Office.

$2.5 or $5.6 billion? - Misleading headline by Straits Times on Abu Dhabi’s purchase of Chartered

From our Correspondent

The state media Straits Times has come up with another deceptive headline to mislead Singaporeans about the sale of Chartered Semiconductors by Temasek Holdings to Abu Dhabi group ATIC. (read ST article here)

Appearing under the “top story” section, the headlines screamed: “Abu Dhabi fund offers $5.6b for Chartered.”

Its first paragraph reads:

“A CASH-RICH Middle East sovereign wealth fund has made a $5.6 billion bid to acquire home-grown chip-maker Chartered Semiconductor.”

Let us compared the Straits Times’ headlines with reports from three other international news agencies:

Bloomberg: Abu Dhabi to buy Chartered Semi for S$2.5 billion

“Abu Dhabi agreed to buy Singapore’s state-controlled Chartered Semiconductor Manufacturing Ltd. for S$2.5 billion ($1.8 billion) to create a challenger to the world’s second-biggest maker of customized chips.”

[Source: Bloomberg]

Wall Street Journal: Abu Dhabi to buy Chartered Semi, seeking to challenge top Chip firms

“Abu Dhabi’s Advanced Technology Investment Co. agreed to buy Chartered Semiconductor Manufacturing Ltd. for US$1.8 billion in cash, in a deal that would create a chip foundry that could better compete with Taiwan’s leading contract-chip manufacturers.”

[Source: Wall Street Journal]

Reuters: Abu Dhabi to buy Chartered: Hynix stake up for grabs

“Abu Dhabi’s state-owned ATIC offered to buy Chartered Semiconductor for $1.8 billion, while major shareholders in Hynix began the sale of a $2.8 billion stake, kickstarting consolidation in a chip sector emerging from its worst ever downturn.”

[Source: Reuters]

All three international news reported that Abu Dhabi has offered S$2.5 or USD$1.8 billion dollars for Chartered Semiconductor, so why did the Straits Times reported it as S$5.6 billion dollars?

The discrepancy of $5.6b-$2,5b = $3.1b is due to Abu Dhabi assuming Chartered’s debt of $3.1 billion dollars, a staggering figure.

It is an established practice for news agencies to report financial transactions and purchase of companies at the purchase or take-over price which is not inclusive of the target company’s debt.

Naturally, if ATIC were to take over Chartered Semiconductors, it will have to assume its debts of S$3.1 billions dollars, but this is irrelevant to the real worth of Chartered which is based on its latest share price.

The Straits Times headlines give unsuspecting readers the erroneous impression that Chartered is worth S$5.6 billions dollars which it is not.

The fact is ATIC offered “only” S$2.5 billion dollars for chartered and not S$5.6 billion dollars.

The misinformation was compounded by the first paragraph in the Straits Times article stating that Abu Dhabi made a “S$5.6 billion BID” to acquire Chartered which is grossly inaccurate.

The journalist Chua Tian Hou then deliberately chose to publish the facts at an obscure corner right at the bottom of his article:

“Under the deal, Atic will pay $2.5 billion for the shares and assume $3.1 billion in debt and convertible redeemable preference shares.” Now, that’s quite different from the “$5.6 billion bid” reported in the first paragrah.

This is obviously another cheap ploy to lessen the damage to Temasek CEO Ho Ching’s embattled reputation by making it appear that Chartered was sold for a higher than market price.

Readers who just make a cursory glance at the headlines and the first few paragraphs without scrutinizing the article carefully will be misled to believe that Chartered was indeed sold at doubled its share price - a great deal for Temasek if it is true.

If Chartered was indeed sold for S$5.6 billion dollars, this means that ATIC will purchase it more than S$6.00 per share which is much higher than its closing price of S$2.67 per share yesterday. This will be an unprecedented generous offer seldom seen in the industry.

Straits Times also fail to mention that the IPO price of Chartered in 1999 was USD$20 or S$29 and Chartered was making a loss for the last 2 years while the Taiwanese chipmakers started and run by private entrepreneurs continued to grow and expand, going on to dominate the market.

In 2008, Chartered was US$102 million in the red. For the first two quarters of 2009, they had already lost US$ 143 million. The second half of 2009 is not expected to be rosy as well.

Last year, the company’s debt rating was reduced to “junk” by Fitch Ratings on concerns that it was not generating enough cash through its operations. This had increased the company’s cost of debt and reduced (or eliminated) its abilities to raise further funding through the debt market. (read more here)

The Straits Times should have reported the transaction as objectively and accurately as possible adhering to international norms of reporting like those employed by Reuters, Bloomberg and Wall Street Journal instead of adding such a subtle and deceptive spin to mislead the readers.

Though Temasek had finally gotten rid of an unprofitable company, it has suffered a terrible loss from the deal. The Straits Times journalist should have contacted Temasek to find out the exact figures of the losses rather than becoming their unofficial spin doctor.

Related articles:

>> Sale of Chartered - an anatomy

>> Temasek to suffer heavy loss from sale of Chartered

Temasek decouples itself from the Singapore public

From our Correspondent

The latest changes made to Temasek’s Constitution was described as a minor “tweak” by the state media.

The revised charter will more accurately reflects its investment objectives and relationship with the Singapore government.

Instead of simply holding and managing the Government’s investments in companies, Temasek now describes itself as an investment company managed on ‘commercial principles’.

There is a huge world of difference between the two definitions. While “managing the government’s investments in companies” still retain a tenuous link to Singaporeans, Temasek’s latest tweak to become a pure “investment company” will decouple itself completely from the public.

Why Temasek is so eager to masquerade itself as an “investment company” when it is obviously not since its funds are derived from the government and hence the public is anybody’s guess.

Temasek’s began its humble origins in 1974 simply to manage the government’s reserves accumulated from years of budget surpluses.

It has always been a local investor, taking up stakes in major conglomerates such as DBS, SIA and Capitaland before Ho Ching’s takeover in 2002 signals a major change in its investment strategies.

Under the leadership of Ho Ching, Temasek began to move aggressively into regional markets, first acquiring major tele-communication firms of Thailand and Indonesia, followed by India and China though some bids failed due to political concerns.

The obstacles faced by Temasek Holdings in acquiring stakes in foreign firms due to its close links with the government may have prompted the image changeover and its relentless publicity drive to protray itself as an “Asian investment company” instead of a government-owned sovereign wealth fund.

Temasek’s task will be made much easier if it reveals its objectives, investment strategies, ownership and modus operandi clearly like the Norwegian Pension Fund which did not arouse as much scepticism and paranoia as Temasek.

Since it has chosen to keep its cards close to its chest on grounds of “strategic concerns”, Temasek will have to accept the fact that its agenda will always be questioned regardless hard it tries to pretend otherwise.

Nevertheless, the latest move by Temasek to decouple itself from the government and hence the public may be an insidious attempt to gradually to “declassify” itself as an institution to avoid facing public wrath again in the event of another disastrous investment loss in the future.

Throughout its history, Temasek has never been subjected to so much public pressure as of now. In a recent Parliamentary sitting, even the PAP MPs join in the chorus of voices imploring the Finance Minister to shed light on the real reasons behind the departure of its CEO-designate Chip Goodyear.

Temasek’s revised Charter may again proved to be futile as it will not dispel public perception that it is losing monies belonging to Singaporeans.

A better way to alleviate these lingering concerns of the public will be to link its performance in the form of annual returns into the CPFs of citizens or cash handout so that Singaporeans can feel the “tangible” material benefits of its existence.

It will also be sheltered from future criticisms and controversies when losses are incurred. Most Singaporeans understand that there is no guaranteed profits all the time in the financial world. What they are peeved about is that so much money was lost with little accounting or transparency.

The ruling party is quick to grasp the political ramifications of Temasek’s misadventures judging from the desperate attempts of the state media to limit the fallout of late. Despite keeping an extremely low profile, nobody will forget that Ho Ching is the wife of Prime Minister Lee.

Mr Lee must be counting his luck that the latest “manoeuvre” by Temasek has gone largely unnoticed by the public. A more alert and proactive opposition would have made an issue out of it immediately.

As Temasek continues its endeavor to transfrom itself into an “investment company” with no ties to the government, Singaporeans can only continue to ask the unspoken question on the mind of many: “Where is our money?”

Related articles:

>> How Norway manages its Sovereign Wealth Fund by Fang Zhi Yuan

>> Temasek’s spin doctors at Straits Times try to salvage battered image

>> Temasek outperforms? by Edmund Khor

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Singapore's Yap Keng Ho - 20 Days in Changi Jail Jail

ST Forum to be used in schools to teach National Education

From our Correspondent

In another move to extend its influence to Singapore students, the Straits Times will be promoting the use of letters published in its forum page as teaching materials for English studies and National Education in primary and secondary schools. (read article here)

The Straits Times’ fourth annual Teachers Forum will be held on 24 September to “show how articles can be used to teach English, social studies as well as national education.” It will be split into primary and secondary school sections.

During the Forum, teachers will share with one another the use of media articles as a dynamic, relevant source for teaching.

The forum will begin with two plenary sessions on the benefits of using “authentic” materials like newspapers to develop “critical thinking.”

It remains to be seen how the one-sided spins and propaganda of the Straits Times can be used to promote “critical thinking” among students.

The ST Forum is highly controlled by the paper’s editors who screened every letter sent by readers carefully to ensure that those critical of the government or its leaders do not get published.

The boundaries for permissible debate are also delineated clearly: while “sycophantic praises” (from PRs and foreigners) and “constructive criticisms” from (the usual ghost writers like Lionel De Souza) are most welcomed, any remote slurs on the nation’s institutions will not be entertained.

In the complete absence of an alternative source of information to compare with, students will be hard pressed to discern for themselves the authenticity of the reports carried by the state media.

All the print media in Singapore are owned by a single company - the Singapore Press Holdings (SPH) whose Chairman is almost always an ex-PAP minister.

Its current Chairman is Dr Tony Tan, an ex-DPM who took over from Mr Lim Kim San in 2005, another former minister.

With their rice bowls in the hands of their political masters, ST journalists seldom dared to venture out of the official line to criticize the government. Needless to say, there is very little objective or investigative journalism found in the Singapore media.

Years of relentless propaganda and some might say “brainwashing” have made Singaporeans one of the most politically apathetic and ignorant citizenry in the world.

Since the government is “right” all the time, few seldom question the actions and decisions made. As such, there is dearth of public interest in current affairs.

The latest attempt by Straits Times to make its presence felt in Singapore schools may arise out of deep-seated concerns and fears that the young generation who spent more time on the internet than reading papers will get influenced by the plethora of alternative news media in Singapore’s blogosphere which are mostly critical of the establishment.

The Singapore media is ranked a miserable 141st position on the latest World Press Freedom Index conducted yearly by international media watchgroup Reporters without Borders, just above North Korea, Burma and Zimbabwe.

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