Reform Party calls for dismantling of GLC structure in its response to ESC report
February 5th, 2010 | 
Author: Written by Our Correspondent
The Reform Party has called for the dismantling of the government-linked company or GLC structure which is “out of step with a modern economy” in its comprehensive response to the Economic Strategies Committee (ESC) report released recently which bears uncanny similarities to some of its core messages.
The ESC recommended that Singapore boost its R&D spending to reach the level of the U.S. and EU.
While the Reform Party welcomes the move to increase investment in R&D, it expresses its doubts if Singapore can achieve the necessary economies of scale or whether “we just end up giving wasteful subsidies to foreign MNCs.”
The ruling party has adopted a “top-down” approach in its venture into R&D, preferring to spend billions of dollars on state-linked agencies and companies to drive R&D rather than to promote entrepreneurship at the grassroots levels as in the United States.
Some of these GLCs are owned partly by Singapore’s two gigantic sovereign wealth funds Government of Singapore Investment Corporation (GIC) and Temasek Holdings which are headed by Singapore’s octogenarian leader Lee Kuan Yew and his daughter-in-law Ho Ching respectively.
Though the ruling party has spent billions of dollars on Life Sciences and Biotechnology over the last few years, it has few results to show for it.
Singapore remains the only first world country which has yet to produce a Nobel Prize Laureate.
Instead of focusing on nurturing its own citizens, the ruling party prefers to pick “winners” and splurges on accomplished overseas scientists, one of whom arrived in Singapore with much fanfare a few years ago only to return to his native Scotland a year later.
The Reform Party criticizes the GLC structure as an obstacle to Singapore’s R&D efforts as it has “held back our private sector and has probably had a stifling effect on innovation, not least through the diversion of talent into secure, well-paid employment rather than into more entrepreneurial roles.”
Singapore’s leading research agency A*STAR is currently headed by Mr Lim Chuan Poh, a former Chief of Army who spent his entire career in the Singapore Armed Forces.
The GIC structure is probably put in place to for political reasons as well as it ensures that the brightest Singaporeans are all on the payroll of the government rather than striking out on their own which may pose a threat to its hegemony subsequently if a “Thaksin Shinawatra” were to emerge among them.
Entrepreneurs are usually fiercely independent and are difficult to “tame” by a paranoid regime bent on control everything.
The Reform Party was founded by respected late opposition leader Mr J.B. Jeyaretnam in 2008 and is currently led by his son, Cambridge-educated economist Mr Kenneth Jeyaretnam.
It has seen an increase in membership lately among young professionals including two former government scholars.
Read the full report of The Reform Party here
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22 Responses to “Reform Party calls for dismantling of GLC structure in its response to ESC report”
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er it should be fanfare
Quote:
(Instead of focusing on nurturing its own citizens, the ruling party prefers to pick “winners” and splurges on accomplished overseas scientists, one of whom arrived in Singapore with much fun-fare a few years ago only to return to his native Scotland a year later.)
I am an entrepreneur and approached the EDB, Spring, MDA, etc..etc 3 years ago for some funding help to develop a new product for the manufacturing industry. After spending 1.5 years going around in circles, I could not even get 1 cent of funding!! Not because they could find fault with my invention – that is is useless etc….
Fed up, I went across the causeway and withing 3 months and with the help of a malaysian partner secured RM150,000/= to develop my invention.
Of course I am disillusioned…. when all the money is being poured into top-down directed programs…. and they think they know everything…
Finally a party of substance with a leader that understand figures.Though new and “wet behind the ears” in politics,the Jeyaretnam name will carry him through.
The onus is upon young Kenneth to rally people of credibility and to be wary of opportunists with skeleton in their closet that will drag him down.Aim for a GRC with a team that can withstand PAP’s and their spies worse scrutiny.Be patient and like your father “PAK SEE BO CHOW”.Onward Reform and REGAIN Singapore back to Singaporeans again.
You know, GIC was set up to make a higher return than the treasury bills that the govt was investing before that.
What have we seen now? It didn’t make a much higher return than the treasury bills govt had invested before GIC’s creation.
It is just a funding agency for LKY to go around the world to give talks.
1. reform party living up to its name.
2. yes, it’s a joke getting a military guy where discipline comes first to head a research agency where creativity comes first.
3. Although world class research takes time to reap rewards due to trial and error as nobody has ventured before in that field of research, singapore is doing more of applied research which should take less time rather than fundamental research which takes more time.
Whether the bioscience research bears fruit remains to be seen, but we aren’t patient forever.
Like this many businessmen in the private sector and sme’s can get more contracts. jobless singaporeans can start companies and earn some money if there is no monopoly. a lot of creativity will come out of this.
Latest GIC news, GIC investing in junior real estate loans in europe, taking more risk than its partner, haven’t it learn its lessons from Stuyvesant loss? pray hard it don’t lose $$ again.
GIC and Deutsche Bank join forces
GIC Real Estate, the sovereign wealth fund of the Singaporean government, has created a partnership with Deutsche Bank to provide debt finance to the European real estate market.
The move is a first step into European real estate lending by the sovereign wealth fund, which has more than £200bn ($315bn) of assets under management, and is a coup for Deutsche Bank, which can use the relationship to step up its property lending business in the region.
Estates Gazette, the UK trade magazine, will report tomorrow that the venture has already completed its first funding deal; it last week provided £140m in debt to finance the purchase of a £208m office block in Canary Wharf in London by a Saudi investor consortium.
Deutsche’s lending platform will continue to originate new debt and the bank is then expected to hold the senior tranches of the loan, typically where the loan-to-value ratio is less than 60 per cent. These are the very safe tranches of debt that will normally always be paid back should the property default, although typically the returns are lower.
GIC is expected to purchase junior parts of loans, although stopping before the higher-risk mezzanine level of debt that typically occurs at a loan-to-value ratio of more than 75 per cent. In return, it can ask for higher rates of return from the borrower.
There is no set amount that either party wants to commit to the sector, with new investments made on a case-by-case basis. It is thought that the pair will lend only to prime single assets or small portfolios with good cash flow.
Lending to the commercial property sector remains restricted, although this is beginning to ease given the attractive rates of interest and fees that can be levied on investors. However, there are still few banks willing to lend more than £100m on a single transaction. Loan-to-value ratios are also restricted, meaning more equity is needed for most acquisitions and giving a potential advantage to Deutsche Bank and GIC’s partnership.
I’m not at all surprise to note the top guy at AStar was from the army, since the past these people had been placed at the top of GLC and govt after their time in the army/navy/air force.
The Reform Party should produce listings of these companies and the competence and performance of each company so as to further this stand!
Forget about creating another “Thaksin”. This wanker used Thai citzens money to buy votes in rural areas and used parliament to escape taxation, which ironically, is where the funding for the rural projects comes from.
@cy on Fri, 5th Feb 2010 4:29 pm
I would be laughing my head off if I wasn’t Singaporean.
Seriously?
Junior debt?
Depending on which European markets these loans originated from, GIC is going to be a world of hurt.
Man we are getting taken to the cleaners.
Probably the price of admission for them to locate here.
Increasing our investment in R&D will not work here.
Our education system here only producing examination smart graduates. Even the most creative Poly undergraduates who produce the most patented innovations were treated as sub-class to the JC (Junior Colleage)mainstream education.
Another failure is our government getting scholars (SAF) to run these entities. They are fitted to command an army or the police. Likewise, can you image Li Ka-Shing to run SAF! PAP better change its mindset, otherwise it will become a dinosaur! Support for PAP will erode if nothing is done out of the sincere hearts of its leaders.We have many friends and relatives are all suffering as a result of its foreign talent immigration policy, which I don’t think it’s all about foreign talent. It’s introducing foreigners to compete with Singaporeans. I sincerely hope PAP will wake up. I heard my friend commented the other day: “I voted PAP all these GEs and he turn around to screw me!” – I have never seen him so angry before. God bless our Nation!
@Clueless on Fri, 5th Feb 2010 3:49 pm
You could also have gone to China, Taiwan or HK venture capital firms to seek funding and you will probably get a few offers.
PAP GLCs & stat boards are only interested if you are a foreign owned company which promises technology transfer. But if you read the adverts that are posted on these tech transfer when they seek applicants, its clearly stated that all are welcome to apply. You do not need to be a Spore citizen. As long as tech transfer is done on Spore soil, its counted as good.
What short sightedness our PAP has, local entrepreneurs who want to do good on Spore soil, get lost. Foreign companies, step right over now.
The GLC is bad for entrepreneurial spirit and only serve squeeze out local businesses.
I know how hard it is to get funding based on a family member’s attempts to find seed money for his start-up business. Essentially, you only get seed money if:
a) you have a proven track record (which obviously start-ups will not qualify for);
b) have deep pockets in the first place (which obviously most start-ups will not qualify for).
It is not uncommon to hear of govt grants being tied to a “dollar-for-dollar” system where the start-up needs to find a certain sum before being “awarded” with a similar amount by the government.
Sadly, such arrangements shows how little our government agencies trust local start-ups and is major hindrance for any young local entrepreneur. Is it really any surprise that we haven’t developed anything really new if our own government is so risk-averse / lacking in trust in locals?
two things could be done urgently.one, someone has to create a database and recruit 6 singaporean voters for each GRC/SMC,to stand in as proposer,seconder and 4 assentor,for contesting opposition candidates.
Political should be transparency to voters about their kitty.If not enough,appeal for donation.do not keep mum about it.Singaporeans will surely help.
Also create a volunteer list.these volunteers list could be used by opposition parties to request help during their election campaign period.
SDP brought this up some time back too.. wonder why the 2 MPs in parliament never talk about this
actually Kenneth Jeyaretnam with his great foresight and economics training from Cambridge was the first to highlight the need to improve productivity in Singapore and reduce reliance on foreign workers.
However, it was not given prominence and the idea is now ’stolen’ by the Economic Strategies Committee.
@Badri
&
@SC
SDP and Kenneth J. should really be the ones deserving the $$$millions for their good thinking, if nothing else.
i cannot help but wonder if Mr lim chuan poh is indeed capable of running any business organisation given the fact he is a saf man. i kept comparing him and all the saf men as very similar to our great Mymnmar general friend . as li looked at the picture, we are very similar to mymnmar ?
i really hope i am wrong. otherwise we can ask ourselves which direction are we heading for in the next 50 years.
To : Reform Party
Please dismantle GLC structure and other unfair practices when your Reform Party win Election.
We are hoping for this day to come
Agree with Cy that “it’s a joke getting a military guy where discipline comes first to head a research agency where creativity comes first.” He should have gone to Ministry of Home Affairs or other similar likes.
I also agree that the top down approach is not the best way to go. Resources will be wasted as the large GLC corps are too slow and inefficient to move. Maybe we should look into how Israel’s SMEs manage to churn out so much innovative research and products.
This has how the PAP gevernment been working.. look at all the top positions in the GLC companies, most of them reitred army officers, or ex-ambassadors, and anyone related to the PAP machinery.
It will be interesting to do a research on all the GLC companies, and see who runs these companies.
The PAP government has not in my knowledge been supportive of any local start-ups. I have even heard of some who had their ideas stolen by the people who evaluate their proposals after rejecting these.
If you are foreign owned, it is probably much easier to get funding than any local company, many of which I know have given up even thinking about getting any support. On the other hand, they have people who have absolutely no idea of the field to invest in billions just ot get some lower level scientist from some Ivy League universities, afterwhich they get screwed, andleft without any inkling of any success.