TR EMERITUS

By Fang Zhi Yuan, Senior writer In a recent interview with Bloomberg Television (read article here), Singapore's Finance Minister Tharman Shanmugaratnam revealed that  Singapore’s state-owned funds invested about $24 billion in UBS, Citigroup and Merrill Lynch in the past 14 months. Bank losses worldwide from U.S.-originated bad assets may reach $2.2 trillion, the International Monetary Fund said in a report released on 28 January 2009, more than the $1.4 trillion it predicted in October. The IMF report signaled that writedowns and losses at banks totaling $1.1 trillion so far are only half of what’s to come. Losses on that scale would leave banks needing at least $500 billion in fresh capital to restore confidence in their balance sheets, the fund said. Singapore’s leaders have defended the performance of the city’s state-owned investment companies after a plunge in the value of their stakes in Citigroup, Merrill Lynch and other global banks. Government Investment Corp, which manages the country’s reserves, invested about $18 billion in UBS and Citigroup since December 2007. Temasek, which has a $130 billion portfolio, increased investments in Merrill Lynch and Barclays Plc as the credit market collapsed in 2007 and 2008. As of last week, the shares of Merrill Lynch, Citigroup and UBS have fallen by more than 50% with Temasek staring at a potential paper loss of over S$20 billion dollars, the size of Singapore's "Resilience Package" unveiled lately in Budget 2009. Temasek Holdings bought shares in Merrill Lynch when it was considered too risky by Bank of America. The New York Times reported in October last year, a month after Bank of America acquired Merrill Lynch: "Bank of America had considered purchasing Merrill some 10 months ago but found its mortgage exposure too unpredictable." Temasek and GIC don’t have to explain their decisions – they are not publicly traded. The Ministry of Finance which owns both SWFs insisted on secrecy so as not to tip off their competitors. Till recently, Temasek and GIC do not publish any annual reports and even now, they provide only a vague outline of their investment portfolio with little details. Singapore's finance ministry oversees Government of Singapore Investment Corp. and Temasek Holdings Pte, each managing more than $100 billion. Where do these funds come from ? Nobody has any idea as Singapore's SWFs are not required by law to reveal their income and expenditure. As Singapore has no natural resources like the Norwegien Pension Fund which managed revenues from Norway's oil and gas production, the funds of these SWFs are probably accumulated via a combination of budget surpluses from previous years, CPF contributions of Singaporeans and earnings accrued through the sale of land and public housing. Regardless of where the funds come from, they belong to every Singaporean who have stakes in it. Every company listed on the Singapore Stock Exchange are required to publish an annual report to be sent to every shareholder. Yet few Singaporeans are aware of how these SWFs are being managed. The government has always emphasized that the SWFs are prudent investors seeking long-term returns as defence for short-term losses. Besides Merrill Lynch and Citigroup, Temasek had made a series of questionable investments in the last 2 years including Thailand's Shin Corp and Australia's ABC group. Who is in charge of investing our nation's reserves ? Who are the fund managers ? Are we employing the right people to manage these critical funds which come from the blood and sweat of ordinary Singaporeans ? The Prime Minister's wife, Ho Ching is in charge of Temasek and his father, MM Lee is the Chairman of GIC. The former was an engineer while the latter is a lawyer. Nobody knows who else is advising them on the investment decisions. More accountability and transparency are needed in the functioning and management of Singapore's SWFs. These are public monies and information should be made readily available to Singaporeans. Political leaders and their affiliates should not be in charge of the funds which should be left in the hands of experienced fund managers with a proven track record in the finance and banking industry. External auditors should be called in to review the funds on a yearly basis to assess the performance and competence of its fund managers. A detailed annual report should be published online for all interested Singaporeans to read. Singapore has many talented and experienced investment bankers and managers, some of whom are working in reputed international corporations. There is no reason why politicians with little or no experience in the finance industry are appointed to manage such huge amount of public monies. Hiding behind a veil of secrecy under the pretext of guarding one's trade secrets is no longer relevant in this year and age. If Norway's Pension Fund, the second largest SWF in the world, managing a portfolio of more than US$350 billion dollars has been able to publish a detailed annual report to account for its investment decisions, strategy and spending without going broke, there is little reason why Temasek and GIC should continue its policy of non-disclosure. EDITOR'S NOTE: In my next article, I will shed light on how the Norwegian Pension Fund is managed which is drastically different from Temasek and GIC.  Read More →

By Eugene Yeo In the afternoon at 5pm, the Straits Times online published a Bloomberg TV's interview with Finance Minister Tharman as its TOP STORY. However half an hour later, the article has mysteriously disappeared and is nowhere to be found. The Straits Times "Breaking News" usually keeps its "top studies" and recycle them to other categories after a while. I have checked all categories and was unable to find the article. The interview was actually published by Bloomberg on 29 January 2009 in which Mr Tharman revealed that Temasek and GIC have invested a total of about $24 billion in UBS AG, Citigroup Inc. and Merrill Lynch & Co. in the past 14 months. This amount is more than the $20.5 billion "Resilience Package" unveiled by the Budget lately which was financed by dipping into our precious reserves. The Straits Times editors must have thought of this as a sensitive topic and censor the article almost immediately after it was published. Unfortunately in this modern era, it is becoming harder for the mainstream media to conceal information as the news is already available on the internet. Doesn't the Straits Times think that this is an important national issue which ought to be made known to the public ? Shouldn't Singaporeans know that our SWFs have ploughed in more than $24 billion last year to "invest" in U.S. banks ? Are the authorities afraid that they may have to answer embarrassing questions from the public if this was revealed ? You can read the original article here  Read More →

By Fang Zhi Yuan and Lim Siow Kuan In a recent article by Agence France-Presse - "Malaysiakini at vanguard of media revolution" (read article here), political analyst James Chin from the Kuala Lumpur campus of Australia’s Monash University, said Malaysiakini could only have existed in places like Malaysia, Singapore or Burma, simply because the mainstream press have no credibility. While it is true that Malaysiakini was able to establish itself as a credible alternative to the mainstream media precisely because of the latter's overt pro-government stance, the same reasoning cannot be ascribed to Singapore where the mainstream media still retains a sizeable audience from both the intelligentsia and masses. Both Singapore and Malaysia have similiar draconian laws governing the printing press. Singapore introduced the Newspaper and Printing Act in 1975 to control the ownership of news printing firms while Malaysia's Prime Minister Mahathir Mohamad introduced a law in 1984 requiring print and broadcast journalists to obtain, and annually renew, government. In Singapore, all the print media in the four languages of English, Chinese, Malay and Tamil are under the ownership of one single government-linked company - the Singapore Press Holdings whose Chairman is almost always an ex-PAP minister (Its current Chairman is ex-DPM Dr Tony Tan). The circulation of foreign papers is severely restricted and those who went afoul of the government's censorship like FEER and Wall Street Journal were subjected to heavy fines and subsequently banned from Singapore altogether. Singaporeans, especially those born after independence have grown up knowing only the pro-government state press which explains why they are seldom able to distinguish between truths and spins inherent in the reports unlike an astute reader from a developed country like U.S or U.K. Though the major dailies like Utusan Melayu and New Straits Times are controlled by the Malaysian government, the newspapers with a smaller circulation especially the Chinese tabloids like Sin Chew Jit Poh still retains a certain degree of independence and flair to provide contrarian views to the government's mouthpiece. Malaysians who have long been sceptical of the mainstream media's coverage of political affairs take an instant liking to Malaysiakini's independent streak almost immediately, facilitating its eventual ascension to the pinnacle of Malaysian journalism. Though the initial years were challenging, Malaysiakini was able to survive largely because of the low operating costs and wages in Malaysia. A fresh graduate journalist commands a monthly pay of only RM$1,500 in contrast to Singapore which ranges from S$2,800 to S$3,500. Malaysiakini is able to attain such national prominence in the journalistic landscape of Malaysia partly because Malaysia is able to provide it with a large readership in the first place. Its daily readership of 100,000 unique visitors amounts to only 0.37% of Malaysia's population of 27 million people. Applying the same percentage to Singapore's 4.7 million people will only yield 17,390 readers a day. Malaysiakini is founded by Steven Gan, an ex-journalist with The Sun for 3 years. Being a professional journalist himself with the relevant knowledge and experience, he is able to form a team and build up a credible online news daily in a short period of time. Steven is also willing to risk his livelihood and personal freedom to write the truth - he was jailed for a few weeks in 1995 for reporting on the situation in East Timor. On the other hand, Singapore journalists have too much to lose by going against the wishes of the government. Junior journalists are subjected to close supervision and frequent assessments before they are allowed to write on political matters. Senior editors are too well-paid to allow any lapses of judgement to occur which may break their rice bowls. The political bureau is run by journalists with links to the ISD. Is there little wonder that we have not seen a Steven Gan emerging from the Singapore journalistic circles yet ? Are Singapore journalists devoid of ideas and passion for their profession ? Why are they contented to be the government's 'reporters' and not a real journalist to seek out and report the truth fearlessly ? 'Liberals' within the profession like Cherian George and P N Balji have left the profession to focus on academic research.Young promising journalists like Melanie Lee have opted to ply their trade with foreign news agencies like Reuters rather than to betray their own conscience by working for SPH. Is there a need Singapore to have its own "Malaysiakini" to serve as an alternative to the print media ? Judging from the rising readership of news blogs like The Online Citizen, Singapore Enquirer and Wayang Party Club run entirely by self-funded part-time amateurs, it does appear that there is a sizable group of readers out there who are tired of the government-friendly mainstream media and are early seeking alternative news sources. For a 'Singaporekini' to establish itself as a credible online news daily like its counterpart across the causeway, it should be helmed by a team of full-time journalists with the relevant training and experience in journalism. There must also be an external agency which is willing to fund the project for a foreseeable future till it takes off. We have seen how Malaysiakini and subsequently other influential online dailies like Malaysia Today and The Malaysian Insider have served as agents of change in ending 50 years of unbroken one-party hegemony in Malaysia. There can be no free elections without a free press. Perhaps this yet to be founded "Singaporekini" will be our sole hope of freeing ourselves eventually from the shackles of one-party rule.  Read More →