The Problem With Buddies

One of the most prominent items to be put on display as a result of the acquittal of Parti Liyani, the Indonesian maid who worked for Mr. Liew Mun Leong, the former Chairman of the Changi Airport Group, was the extent to which Singapore’s high-level businesses were connected.

Within moments of that rather damning verdict being made public and the explosion of anger towards Mr. Liew and the businesses where he was serving on proceeded to rush out and defend him in public. The most noticeable was our state-owned holding company, Temasek Holdings, which went out of its way to remind the public that Mr. Liew had contributed a lot to Singapore (which was an irrelevant point in light of the fact that Mr. Liew had very likely been involved in something where the legality was questionable). Why would such large organizations rush out to defend the reputation of a man whom had publicly been exposed for trying to illegally fix someone with so much less than him?

While I don’t have concrete answers for the individuals who defended Mr. Liew in public, the answer is probably because Mr. Liew was one of them and they were simply defending their own kind. This leads to one of the most problematic issues in Singapore – crony capitalism.

According to Transparency International, Singapore ranks as one of the top five least corrupt nations on the planet and it is the only Asian nation on the list. Lee Kuan Yew was very particular about ensuring that the public sector would be known for its integrity. His vision was for Singapore to be a shinning beacon of honesty in a rather turbulent neighborhood. He saw to it that there would be a stick for anyone of his public servants who had a whiff of corruption surrounding them (this is the man who gave a minister the choice of suicide or public humiliation) but at the same time he paid his public servants well (think of the world’s highest paid ministers). The system is seemingly good. As well as our ranking on Transparency International’s list, we are also praised by everyone else for having clean public administration. In Singapore, don’t even think about handing over a brown envelope with cash if you are dealing with any public servant.

There is, however, one slight problem to the Singapore system. While you cannot hand money to public servants, knowing people seems to work in business deals, hence while we may rank highly and alongside the Nordic Countries in terms of corruption, our ranking in the index of crony capitalist is closer to that of our neighbors and that bastion of honest government – Russia. Our ranking on the crony scale can be found below:

What’s particularly noticeable about this list is the fact that the “crony industries” or the industries where knowing people is an essential part of the game form a particularly large chunk of our economy. These would be things like construction, property and shipping.

The extent to which this was brought home to me came from a conversation I had with a director of company we had just put under. I told him that I didn’t understand how small subcontractors would make money. First you have to come up with vast amounts of cash to do the project. Then, at a certain stage, you send it a “progress claim” which is essentially telling your pay master what you think you should be paid. He (they usually are in construction) then has to verify the value of your work, and if he needs to keep the bean counters happy, its inevitable that he’ll find fault (in theory there’s a legal mechanism, in practice, the one holding the money is the one with the power). Once you agree to a price, then you send in an invoice and the credit terms are at least 60 days. I cannot comprehend how this power distortion makes it possible for small businesses to survive. His reply was telling. He told me that I was looking at things as an outsider – the insiders always ensured there was a godfather inside the paying party’s organization that would take care of them.

There is, technically no corruption in Singapore. Yet, somehow contracts are inevitably awarded to the same people and since the industries like construction and property development inevitably involve large numbers of manpower and machinery, the sums we’re talking about are huge – hundreds of millions if not billions. If you study Singapore’s rich list, you’ll notice that the big fortunes are inevitably in one thing – property. It’s also a case of the same names coming up again and again.

Now, this is not particularly unique to Singapore. America’s rich list has also been pretty much the same. However, the American list isn’t in the industries that require you to have a “Godfather.” Gates, Bezos, Jobs and Buffet needed a vision and did create something different. Our guys built real estate and ensured that their profits would forever remain healthy.

While you cannot accuse anyone of dishonesty here, the hold of these industries and the practice of needing “Godfathers” to protect you cannot be healthy in any shape or form. Innovation for one, is never encouraged. More worryingly, government becomes compromised in times of crisis. Just look at the explosion of Covid-19 cases in worker dormitories. The whole world knew that the conditions in the dorms was essentially a breeding ground for diseases. There were previous cases reported in the press. The Minister of Manpower herself admitted that the dormitories were simply not up to standard and more worryingly she admitted that the government had known about this for sometime but never made the moves to force the industry to clean up because the industry complained about rising cost.

What’s a little less spoken about was the fact that the dormitory owners had “Godfather’s” to look after them. Think Centurion Corp, which is admittedly one of the better run dormitories. The main characters were involved in the grassroots. The compromise, the government stepped in to pay for cash rich companies to make conditions livable. No matter how you spin it, it cannot be right for a government that prides itself in honesty, bailing out a cash industry to do what it should have done in the first place.

You can’t bribe people here but if you are in certain dominant sectors of the economy, you need to find a godfather to look after you. Sure, who you know is always important but it cannot be to an extent where who you know becomes a driving force in getting things done. We need to build up dynamic sectors, those with creative destruction rather than those which function on back scratching. It’s the only way we’ll progress to the next level.

 

Tang Li

*Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.

 

 

 

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21 Responses to “The Problem With Buddies”

  • Do more:

    Need to do more to build and encourage entrepreneurship here…especially the jobless and underemployed PMETs.
    Government and GLCs should give some space to private companies to build their capabilities and business.
    Only then can they expand out of Singapore on a stronger footing.
    Business owners and managers are different….the risks and motivation are different.
    Singapore need to pivot to a new model to survive …can’t use the old SOP.A major shift is required to equip our people for the new Normal World.

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  • PAP CLOSE DOWN:

    One of these dorm owners wanted to pass the cost of running dorms to the public. Does the public have a share in their profits?

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  • oxygen:

    CRONY CAPITALISM IS PERVASIVE in east Asian economies for decades now.

    Byung-Kook Kim :A new myth is in the making. Once held as a model of development by practitioners and theorists alike, East Asia’s Newly Industrializing Countries (NICs) are now identified as an epitome of ‘crony capitalism,’ a perversely deformed system of political and economic exchange driven by rent seekers.

    The privileged few have allegedly captured the state to pillage banks and sabotage market forces in pursuit of rents. But imbued with Confucian norms, which Francis Fukuyama (1995) once characterized as limiting the ‘radius’ of trust to familial ties, society cannot weed out rent seekers.

    The emphasis on personal loyalty is held as breeding clientelistic networks, which easily degenerate into a collusion for monopoly profits. Hiding behind a profoundly opaque corporate governance structure and protected by dense political patronage networks, business firms engage in shady deals to share rents with party politicians and state bureaucrats.

    From this perspective, the 1997 financial crisis was a logical outcome of East Asia’s exclusionary cultural proclivities, opaque institutional arrangements, and shady business practices.

    Crony Capitalism’ in South Korea, Thailand and Taiwan: Myth and Reality

    https://www.cambridge.org/core/journals/journal-of-east-asian-studies/article/crony-capitalism-in-south-korea-thailand-and-taiwan-myth-and-reality/4F3893E60C3155EEBD4E54C20A4DE6FA

    Every participant in the crony circle reap his/her harvest of economic rent BUT IN THE REAL TEST OF MARKET RIGORS, they collapsed with each seeking self-preservation of interest.

    The Asian currency crisis reveals a few stark realities

    - crony capitalism is striving in Japan, S. Korea, Thailand, Malaysia, Indonesia and to some extent LEE-jiapore.

    - those with bigger market-place footprint – notably Korean Cheabols and Japanese survive better.

    - those who survive parasitic existence on DOMESTIC economy – gone, notably listed entities in Malaysia, and Indonesia.

    LEE-jiapore crony capitalists in real estate/property are mainly domestic “parasites” haven’t learned and expand their global reach to balance their economic risks.

    My prediction is that a lot of these will be gone – post the Covid-19 pandemic – particularly property developers and related sectors. Some might still be cash rich but trapped with broken dead contracts.

    Local GLCs have long weaken dramatically in the last 10 years – the seeds of decay have already germinated BEFORE THE ONSET OF THE COVID-19 pandemic.

    How many will survive? I am watching.

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  • xoxo:

    Member$ defend member, it is to defend their own kind.

    THEY ARE ABOVE THE LAW.
    THE LAW IS TO SERVE THEIR INTERESTS.

    When COMMONERS *UNINTENTIONALLY* cause THEM * hurt* , THEY WILL MAKE SURE THE POLICE,THE LAW AND JUDICIAL ALL COME TO PUNISH the commoners.
    Even their *buddie$* from KINDNESS SOCIETY n LAW SOC rush to bash those who offended their fellow member$???

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  • MarBowling:

    Birds with the same or similar DNA ALWAYS flock together! So when one of them is in DEEP SHIT, most if not all will jump up immediately to DEFEND the “VICTIM” or the SHITTY ONE!

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  • NotMyProblem:

    PAP CLOSE DOWN:
    One of these dorm owners wanted to pass the cost of running dorms to the public. Does the public have a share in their profits?

    Maybe you can make use of their swimming pool in the mansion on Santosa!!!

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  • Soccerbetting2:

    Reported on TOC :Quote -”
    The Online Citizen

    Certis Cisco officer did not return service revolver after end of shift, found dead at East Coast Park with gunshot wound in head
    S.Ling by S.Ling 21 September 2020 1 min read

    A 42-year-old auxiliary police officer was found dead with a gunshot wound to his head in East Coast Park last Saturday morning.

    Lianhe Zaobao and The Straits Times reported the Singapore Police Force (SPF) as saying that the Certis Cisco officer did not return his service revolver after his shift had ended, according to information supplied by Certis around 1.30 am that day.

    SPF began their search for the officer upon receiving that information.

    Police found him at approximately 6.15 am near carpark C2 in East Coast Park, with the gun beside him.

    The officer was pronounced dead by paramedics at 7.48 am.

    Noting that the investigations are ongoing, SPF said no foul play is suspected.

    Deputy Assistant Commissioner of Police Julian Chee, who is the Commander of Certis Cisco Auxiliary Police Force, expressed deep sadness at the death of the auxiliary police officer.

    “We are deeply saddened to learn that one of our auxiliary police officers has passed away. We are in contact with his next-of-kin and will provide our support and assistance to them in this difficult time,” he said.

    If you or someone you know are in distress, consider contacting the following helplines:…”Unquote .

    Response :”Noting that the investigations are ongoing, SPF said no foul play is suspected.”

    Everytime,we hear spf said no foul play is suspected .And since no foul play is suspected by spf,this certis officer obviously kill himself .The question is what happened ? This is not the first or second time reported on news that certis officer shot themselves .

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  • Ali Kuan Yew deja vu:

    (We need to build up dynamic sectors, those with CREATIVE DESTRUCTION rather than those which function on back scratching.)

    Rather, it’s been 30 years of unrelenting DISINGENUOUS SELF-DESTRUCTION of the Republic of Singapore by the leegalistic elitism of Sinchiapor Incorporated.

    The founding fathers’ Peoples Action Party devolved into LKY’s Pompous Ass Party … sheeples being destroyed creatively, mercilessly; our $$$ public housing, our $$$ medisave, our tencents retirement savings ….

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  • opposition dude:

    And the point of the long winded article is that this is called LEGALISED CORRUPTION. While you can’t bribe someone outright like some daft PRCs love to do you most definitely can be assured of some fat building contract or two if you know the right people.

    Surbana Jurong comes to mind when Teo’s husband was accused of corruption in the bid for setting up Expo as a temporary Covid isolation facility.

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  • Harder Truths:

    communism [ kom-yuh-niz-uhm ]

    noun

    a theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state.

    a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party.

    the principles and practices of any Communist Party.

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  • TUMASIK Patriot:

    $600,000 is PEANUTS to pay for an Icon of Kidney Service to the People of Singapore…Mr T.T. Durai…

    Quoted by NON-Other than Mrs Wooden-Piece-of SHIT!!!

    Kidney Man was Jailed & Bankrupt>>>and his Bankruptcy was REMOVED thanks to a Man with many Loves well catered for in his Life…L E C Letts

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  • TumasikPatriot:

    Good article Tangfastic… but you are only scratching the SURFACE of LEEgal Corruption…
    Most deals looks LEEgit done in Singapore…BUT all LEEgal Corruption are Received overseas…CASH/Deposits into 3rd party account mostly BVI Co. or Gratification through Lavish Entertainment with High Class Chicks thrown in

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  • PAP mandate strong:

    What nonsense ?
    Are u truly upright honest or a hypocrite ?

    Who dont want to be born with a golden spoon ? Let alone godfather ?

    Why ? Tang Li wants to born in 3rd world countries in very poor family. Drink dirty water or only one meal a day ? Maybe even have to s**k co*ks or sacrifice a hole for a living ? Go and dig in mines in Africa ?

    Elon Musk , sure … u seen his success but b 4 that . He mentioned when he just set up many years ago , can only live and sleep in office couch. Bath in YMCA. That is provided he’s successful in the end.

    Jeff Bezos , when he started Amazon it was just selling books. And the company make no profit for 10 years if i remember correctly. But he can convince investors to keep funds rolling in. But before Amazon he was working as i think fund manager in some big famous investment fund house. He also wu liao a plus he sure know some rich boys.

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  • Great Asia:

    PAP offers wealth, fame and power.

    I’ve told you, right?

    Ha ha ha!

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  • liew mun leong must be jailed:

    we hope pap PA paid IBs are reading this and reporting back to pap PA chairman pap clown s/o pap master liar lee kuan yew.

    1, our IC numbers and HDB rental unit addresses available on request.

    2, we strongly object to the pap hypocrisy shown by pap parleementarians. imagine the culprit was WP and not liew mun leong. we are sure, from past experience, every of the pap parleementarians shall jostle one over another to make a point about why the WP must be jailed. as justice has it, the culprit is liew mun leong. so the utter silence. what is that past experience we mentioned? WP Mr Yaw SL vs. pap speaker mike palmer aka pap PA director laura ong. when Mr Yaw SL was reported to have been a little too close to a WP female supporter, all the pap parleementarians self righteously one after another said many things about WP Mr Yaw SL. as justice has it, a little later, pap speaker mike palmer palmed pap PA director laura ong swee swee. the same folks who spoke at length about WP Mr Yaw SL had not a single word about pap speaker mike palmer aka pap PA director laura ong. see the pap hypocrisy.

    3, in all kDramas, the police prosecutor judge all don’t act out of charity. rather, they all act out of S$m, or the potential for S$m. we suspect, in liew mun leong case, based on kDrama scenarios, the #1 on the take is the prosecutor whose father is a kaki of liew mun leong. as in all kDrama, prosecutor either bullies or pays the police to be on the same side. since it is in pap island, S$m rather than bully is assumed per kDrama normal. what about the judge? kDrama judges all cannot move unless the S$m is substantial. our suspicion is this time a S$m role is CAG or Surbana or Capitalland is promised.

    are we sure? we are more than certain. because no human works for free and in pap island not a single pap Lj or pap Cb works for free. as one pap Cb famously said, the one call gracefool, pap folks need S$m to maintain their standard of living.

    what are we concerned?

    we say it here first. the pap dy agc is going to free liew mun leong on the basis of an honest mistake let’s move on judgment.

    if maid is 2 years 2 months, liew mun leong can be free? like that where got justice.

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  • Liddat Ho-la-Ho-la:

    Perhaps, it could have a massive aristocratic domino effect if pubicly scrutinised.

    So all the kingsmen and all the king’s horses must jump in to rescue myhumty-dumpty from a great fall. But fall did he.

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  • bornloser:

    Does Li Sheng Wu have a chance?

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  • PM LHL talking cock. Again:

    Straits Times: Rules-based multilateral system key to tackling global challenges: PM Lee Hsien Loong

    PM LHL must be blind or stupid. Multilateral systems are useless if countries like China cheat. China cannot be trusted. It cheated on trade, COVID-19, land grab in the South China Sea, etc.

    Only bilateral agreements will work. Trump is right – nationalism instead of globalism. Fair trade instead of free trade.

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  • J Teo talking cock again:

    Straits Times: About 5,400 jobs on offer in food sector despite Covid-19 pandemic

    Most of the jobs are low-paying, dead-end jobs foreigners will not want or will not qualify for because of qualifying pay for work visa.

    PAP should stop protecting foreigner working in Singapore and start looking after Singaporeans better by cancelling the Employment Pass or S-pass of foreigners to force them to go home. Singaporeans can takeover their job.

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  • Bad Boy:

    Thats reality driving in China.

    https://k.sina.cn/article_5694211552_m15366c5e003300x47o.html?from=local

    京NS5969司机疯狂别车并扔后车满窗奶茶_新浪新闻

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  • PAP CLOSE DOWN:

    You try first and let me know the experience.

    NotMyProblem: Maybe you can make use of their swimming pool in the mansion on Santosa!!!

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