Written by Ng E-Jay
10 Sept 2009
In its letter to the Wall Street Journal “Correcting Temasek Misperceptions” (08 Sept), Temasek Holdings stated that they “do not manage Singapore citizens’ earnings“, and that it is factually wrong (for the WSJ) to imply that Singaporeans have no choice but to keep their money with the fund.
I am appalled by the latest stand Temasek Holdings has taken, which seems to suggest that the assets they manage have nothing to do with the productive work of Singapore citizens and the wealth they have created for the nation over the past 5 decades.
Temasek Holdings was responding to an earlier WSJ editorial “Temasek’s Revised Charter” (31 Aug), which argued that Temasek’s latest charter “skirts the basic conflict of interest between the public interest of protecting citizens’ earnings and the private-market imperative of taking risks to seek returns“.
Temasek’s updated charter now portrays the investment holding firm as operating purely on commercial interests and as being answerable only to its stakeholders, including the Government which holds all the shares in Temasek as well as institutional investors who have purchased Temasek’s bonds.
In contrast, the old charter stated that Temasek manages investments for the long-term benefit of Singapore, and that Temasek would perform nation-building roles like helping to broaden and deepen Singapore’s economic base, and nurturing new industry clusters in Singapore.
The new charter makes no mention at all of Singapore.
I see the latest developments as yet another setback for Singaporeans who have been demanding greater levels of transparency and accountability from Temasek Holdings (as well as GIC).
Firstly, the latest statement by Temasek that they do not manage citizens’ earnings is mind-boggling.
Temasek Holdings is an investment firm created by the Government to manage our past reserves, which is essentially our national savings not utilized by the Government during its present term of office. Where do those assets come from? They come from tax receipts, Government operating surpluses, revenue from land sales, and so on. All these assets rightfully belong to the people as a whole and are the product of the industry of Singapore citizens. The Government is merely the steward, not the ultimate owner, of these assets.
It is therefore right and proper for the people to have a say in how our national savings are managed and to demand that the stewards of those assets are transparent and accountable in their investment decisions.
Secondly, it clear that Temasek has departed from its traditional nation building role of nurturing new industries in Singapore and enhancing our competitiveness through start-up investments in promising companies that may not appeal initially to private investors due to the length of time required for results to bear fruit.
This original role has been discarded, replaced instead by the sole motive of generating returns for stakeholders regardless of the value to Singapore and to citizens as a whole.
Is this the right investment philosophy that should be applied to our national savings?
Shouldn’t our national savings be used for the good of the community and the country, rather than regarded as belonging only to the Government, to be utilized or invested by the Government without any consideration to national goals and priorities?
Rightfully, the role of the Government should be to build value for the nation using all the tools at its disposal, not to manage the nation’s assets for its own private agenda independent of the public interest.
If the Government is now allowing Temasek to forsake its nation building role despite having hundreds of billions of dollars worth of savings under its control, and the Government now wants to use our national assets for its own purposes without any accoutability to the citizens, it is time to ask if this is a Government that is fit to remain in power.