TR EMERITUS

From The Newsroom Team In a stunning reversal,  Singapore's Temasek Holdings Pte. Ltd. said Tuesday that American executive Charles "Chip" Goodyear won't take over as chief executive of the state-owned investment firm, reversing plans announced earlier this year. (source: Dow jones) "Four months into the leadership transition, the Temasek board and Mr. Goodyear have concluded and accepted that there are differences regarding certain strategic issues that could not be resolved," Temasek said in a statement. Temasek said it had reached an ‘agreement’ with Mr Goodyear ‘not to proceed with his CEO appointment’ which was scheduled to take formal effect on Oct 1 when Ms Ho Ching steps down. The statement said Ms Ho Ching has agreed to continue as Executive Director and CEO. Mr Goodyear was appointed a member of the Temasek board on Feb 1 and CEO-designate on March 1. (source: Straits Times) ‘In light of the differences, both parties decided that it is in their mutual interests to terminate the leadership transition process and hence the executive relationship with effect from Aug15.’ It was not known what are the exact "differences" between Goodyear and the Temasek Board leading to his dramatic exit less than half a year after being appointed as its CEO-designate. Madam Ho Ching claimed Chip has started a number of initiatives which she believe will help strengthen the Temasek platform. If this is indeed so, why was Chip shown the exit even before he assumed his position? Given the opaque nature of Temasek's internal modus operandi, nobody will ever know the real reasons behind Chip's dismissal. Chip was brought in to replace Ho Ching as Temasek's CEO in February due to his background as the former head of mining giant BHP-Billton. Goodyear is expected to look at investments in the resource sector, after the fund was burned by high profile investments in Western banks in the past year that created discontent among Singaporeans worried about the state’s savings. It was widely speculated that Ho was pressurized to step down from Temasek's CEO after mounting losses from ill-timed investments in foreign banks to take some political heat from her husband, who is incidentally the Prime Minister of Singapore. The appointment of Goodyear was applauded by many in the financial industry. Wall Street Journal wrote: "The hiring of a foreign CEO is a notable change, and we hope it’s a signal that Temasek and Singapore’s leaders understand the need for more transparency in the company’s operations. The world is demanding more openness and accountability from sovereign-wealth funds, and the shareholder-voters of Singapore deserve nothing less." (Source: WSJ) The re-appointment of Ho Ching as Temasek's CEO is a clear indication that public sentiment is irrelevant in the decision-making process of the establishment. In spite of constant calls for more transparency and accountability from Temasek, the government remains oblivious to the concerns of the people. Ho Ching's 'track record' at the helm of Temasek has been most "impressive". Her decision to sell Temasek's stake in Bank of America at the bottom of the market continued to go unquestioned by Temasek's Board, the Ministry of Finance and government leaders.  Temasek’s loss on BoA alone is estimated around US$4.6 billion, or roughly US$1,000 for every single Singaporean citizen. Big losses too were sustained on most of the rest of the financial portfolio such as Barclays of the UK and UBS of Switzerland. Quite how badly Temasek has done is hard to figure out because the data presented is scanty and unconsolidated. For example, in 2007-08 the value of its portfolio increased by 13 percent to S$185 billion but it is unsure how much of that was simply a capital injection from the government. There are also black holes like its subsidiary Astrea, which borrowed US$810 million in earlier in the decade to invest in a portfolio of private equity and buyout funds. Another fall for Wall Street fashion which will likely be reflected in pensions for Singaporeans. (source: Asia Sentinel) In Singapore's unique brand of "meritocracy", it appears that some people are irreplaceable no matter how many mistakes they make. Since they are no 'lesser mortals', they are only capable of 'honest mistakes'. Singaporeans should stop lamenting the latest U-turn by the government. After all, we have no say absolutely at all in how our nation is being governed. It is time to 'move on' for the sake of 'public interest'.  Read More →

By Eugene Yeo Japan’s ruling Liberal Democratic Party’s approval rating fell 4 percentage points to 20 percent, nearly a record low, the Asahi newspaper reported. (source: Bloomberg) When asked which party they would choose if an election was held now, 42 percent of respondents backed the Democratic Party, compared with 19 percent for the LDP, the paper said. With an election due on 30 August, the LDP which has ruled Japan for more than half a century will soon find itself out of power. The Liberal Democratic Party (自由民主党, Jiyū-Minshutō), frequently abbreviated to LDP or Jimintō (自民党?), is a centre right, conservative political party and the largest party in Japan and one of the most consistently successful political parties in the democratic world. (source: wikipedia) Formed in 1955 from the merger of the Liberal Party with Japan Democratic Party, it has dominated post-war Japan ever since just like Singapore's PAP. The impending demise of the LDP means that Singapore will be the only Asian state which is ruled by one single party since independence. With the exception of China, Vietnam, (communist dictatorships), Burma (military dictatorships), Brunei and Bhutan (monarchies), most Asian countries are run by democratically elected governments though the degree of political freedom varies from country to country. As a country becomes more economically developed and advanced, society and politics will gradually evolved to become more pluralistic, liberal and democratic in nature as evident from the progression made by South Korea, Taiwan and Indonesia from dictatorships to a vibrant multi-party democracy. Neither do the transitions lead to widespread upheaval and mayhem. Taiwan experienced a peaceful change in government in 2000 and again in 2008. Indonesian President Susilo Bambang Yudhyono was re-elected in the recent Presidential election which was largely considered as fair and clean by independent monitors. Across the causeway, the ruling Barisan Nasional coalition which has governed Malaysia since 1957 lost its customary two thirds majority in the general election last year and the resurgent opposition appeared well poised to form the federal government by the next election. Going by current political trends, it does seem that a one-party model is becoming fast obsolete in the face of a rapid globalizing world where ordinary citizens clamor for more political rights and civil liberties and to have greater say in the running of their nations. The PAP has tacitly acknowledged the political aspirations of Singaporeans when Prime Minister Lee ushered a series of "reforms" to increase the number of non-PAP MPs in Parliament to twenty to allow for more alternative voices to be aired and heard. However, he was quick to proclaimed that a two-party system is unsuitable for Singapore and the PAP, with its near monopoly on talent, remains the best bet Singaporeans have to govern their little island state. What are the possible explanations for the PAP's political longevity? Since coming to power in 1959, it has won every election by overwhelming margins. While it is undeniable that the PAP has brought economic prosperity to Singapore, it is suspect whether its continued hegemony will be in the best interest of the nation. Political competition is the best way for the people to select leaders who share their vision, aspirations and hopes to lead the nation. A fully responsible, honest, transparent and accountable government will only become a reality in the presence of a strong opposition in Parliament, a robust civil society and a free media. Recent fiascoes such as the loss of billion of dollars by the country's sovereign wealth funds, spate of deaths in the armed forces and the protracted minibond saga have shown us that the ruling party cannot be expected to check on itself. The Japanese people have decided they had enough of the LDP. When will Singaporeans ever get sick of the PAP? Coincidentally, this year marked the 50th anniversary of the PAP in government. With no viable challengers in sight, it is not unforeseeable that they will be celebrating their 100th anniversary in 50 years' time.  Read More →

By Eugene Yeo Which has been the most profitable property developer in Singapore? The answer is an oxymoron since HDB itself does not quite qualify to be a commercial company and yet it is responsible for 85% of all residential projects on the island. In a previous article, Jeremy and I wrote about how rocketing prices of HDB resale flats are popping the lacklustre private property sector up which is attributed partly to the hike in HDB valuation. The PAP has always used the high ownership of homes and rise in asset value to trumpet its "achievements" in improving the lives of ordinary Singaporeans. What it did not reveal is that HDB dwellers "own" their leasehold flats for only 99 years and that the inflated property prices have burdened them with increasing debts. Rising property prices will inadvertently led to higher revenue for the government: 1. Since the prices of new HDB flats are pegged to the value of resale flats in the vicinity, higher prices transacted for resale flats will enable them to make a bigger profit from the sale of new flats. 2. Higher stamp duties collected from the sale and resale of properties. 3. Higher property taxes. 4. Higher levy for HDB resale flats. 5. Higher income taxes from property transactions. (soon to be implemented) At the same time, Singaporeans will be further burdened by mounting debts from the housing loans they take out from the banks to finance the purchase. No doubt the interest rates are at an all-time low now, but it's no insurance against future hikes. With the bulk of their salaries being used up in the mortages, Singaporeans will have little money left for retirement which also explains why we have one of the lowest spending power in the region. The majority of the population will continue to be embroiled in the rat race in order to service their debts which inadvertently contributes to the citizenry's political apathy and ignorance. Who will have time to participate in politics if their only meaningful pursuits in life is to make money, money and more money? Who will dare to go against the ruling party at the risk of breaking one's own rice bowl? And who will be aware of the inherent flaws perpetuated by our obsolete one party system when one is bombarded with state propaganda on a daily basis? Let us not forget that the Singapore government is ultimately the biggest landlord and property developer at the same time. The property market is a cash cow providing a source of endless, easy and cheap revenue for the government's coffers. With literally no opposition in Parliament to check on the ruling party, our generation as well future generations will never know how much we have been short changed by our unique "public housing" which is no longer that "public" after all.  Read More →