TR EMERITUS

MP and new citizen, Dr Janil Puthucheary As soon as Catherine Lim puts pen to paper, she gets the PAP and its supporters all hot and bothered. Her open letter to PM Lee, published in the South China Morning Post, raised the concern that trust in the government was lacking. First, Singapore’s consul general in HK (Where SCMP is based), Jacky Foo, wrote a letter to the SCMP to insist that Catherine Lim was wrong, citing a study done that showed trust in the government was high, although he failed to mention that the same study showed that trust in individual politicians was pretty low. Then a certain (or should I say uncertain) Eugene Tan did some statistical gymnastics on the ST Forum page to try and prove that the PAP is highly trusted. Now Dr Janil Puthucheary has volunteered to wade into the fray on PM’s behalf (PM being wise enough not to get involved so far) with yet another letter. While Dr Puthucheary did make a good point about how trust may fluctuate over the short term, and how good government is a long-term endeavour, he wasn’t able to control himself (unlike the previous two fellows) and decided to add some of his own personal attacks into the piece, saying that Ms Lim “could not be trusted to be consistent” and insinuating that she was one of the “jaundiced commentators on the sidelines”. The second, especially, reeks of then-PM Goh’s “join politics or shut up about it” rant back when Ms Lim decided to pen him a letter. Dr Puthucheary, who has been saving babies for about 13 years now (although this is irrelevant), Jacky Foo and the mysterious Eugene Tan all seem to have forgotten that many others have made exactly the same observation, with nobody in government taking umbrage: ST Editor at Large Han Fook Kwang, for one. NMP Laurence Lien for another. Dr Puthucheary has come down excessively hard on a moderate and reasonable critic, and this does his party and government no favours at a time when (I assert baldly) trust is diminished and the G needs to appear reasonable and inclusive. I'm sure Dr Puthucheary will also consider me another jaundiced commentator on the sidelines. But, by definition, all commentators are on the sidelines, and it's so easy to look down on the commentators and fans when you get picked for Singapore's "first 87". It really makes his reference about getting feedback from Singaporeans look like lip service if he cannot listen to Ms Lim without getting all worked up.   Daniel Yap * The author blogs at http://doulosyap.wordpress.com   Editor's note: The Eugene Tan who wrote to ST Forum is not NMP Eugene Tan. This has been verified by TRE.  Read More →

Singapore river in the 1930s - our forefathers working as coolies We can surely excuse the author for being ignorant about history. When were the Filipinos here to help build this Singapore economy? If I remember my history well, Singapore was founded in 1819 by Stamford Raffles, and the development of Singapore began with the arrival of the traders from near and far, and the infrastructure in this British Colony was built by laborers from India and China. This island continued to grow as an entrepot largely from the hard work of the four main ethnic groups in Singapore – namely the Chinese, Indians, Malays and Eurasians. Since when did the Filipinos featured as a significant ethnic group in Singapore from the time after Singapore’s founding in 1819 to our independence from merger in Malaysia in 1965 ? Even from 1965 till the 1980s, the Filipino labor force was insignificant compared to their presence over the last ten years. The four main ethnic groups in Singapore are seeing the numbers being reconfigured with this PAP Government in control. Singapore downtown Even within the Chinese ethnic group – the main dialect groups of Hokkien, Teochew, Cantonese, Hakka and Hainanese – are also seeing a slow restructuring with a huge influx of new arrivals from northern and inner provinces of China. In another ten years with this PAP Government in control, Singaporeans will surely see new and different ethnic mix deliberately configured by the PAP. Did this PAP Government consult Singaporeans in any way? Was this part of the mandate that the 60.1% voters gave as part of their vote given to the PAP? It is time that Singaporeans as a whole should awaken to the dubious attempts by the PAP to introduce their hidden agenda of changing the make-up of Singapore society that will allow them to continue their grip on politics in Singapore. The First, Second and Third Generation of the PAP Government will soon pass on – but their destructive social re-engineering policies will surely threaten our collective future for our children and their children.   Emeritus Singaporean * Comment appeared in: Filipinos help SG to become an economic powerhouse    Read More →

After Norway has trashed Singapore 8-0 (some thought the score should be 9-0!) on the issue of Sovereign Wealth Fund transparency, the writer received several requests to look into how a less transparent SWF stacked up against our own. For this, the writer picked our close neighbour, Malaysia’s Employee Provident Fund (EPF) which, by itself is no model of transparency on the scale of Norway’s Government Pension Fund. Even so, Malaysia thumped Singapore by 4-0. EPF is CPF-GIC-Temasek Combined As a preamble, it is useful to note that EPF not only manages the provident fund like CPF but is also responsible for investing members’ funds both domestically and internationally like GIC and Temasek. As such, there is no equivalent of the Special Singapore Government Securities which stands in the way of transparency and of CPF members getting a return that is not dictated by politics. By its construct, the EPF already beats CPF. Let us see how EPF stacked up against GIC and Temasek. Snapshot of EPF’s Key Numbers EPF’s 2013 Annual Report contains more information on its investments than GIC, and Temasek. First, let us look at EPF’s market value which includes invested funds, new monies and retained earnings (Annual Report which shows the last 5 years return can be download back to 2001). Next, the annual returns and dividend payouts over the past 5 years are provided below. 2009 2010 2011 2012 2013 Ave Return on Investment 4.88 6.08 6.58 6.87 6.97 6.28 Dividend Rate 5.65 5.80 6.00 6.15 6.35 5.99 It can be seen that EPF’s payout to its members is close to its rate of return on investments. The writer surmised that EPF is prudent to retain some of its returns in its general reserves to mitigate against potential losses. GIC’s 5 year return in US$ terms at 2.6% or estimated 0.6% in local currency terms and Temasek’s 3% in local currency terms compares poorly to EPF’s 5-year return of 6.28% in its own local currency terms. As noted in the Norway 8 Singapore 0 article, GIC does not disclose its total market value. Neither does GIC disclose its annual rate of return except for rolling 5, 10 and 20-year rates. Temasek does not have annual rate of returns earlier than 5 years ago. It should also be noted that EPF’s growth in market value should be driven largely by members’ monies because most of its returns are paid out in dividends. Other Useful Information The EPF provides the following information that neither GIC nor Temasek provide. Top 30 risk exposure (all Malaysian companies), not as good as the GPF. Its operating expenses which include the entire infrastructure of EPF, not just its investment fees, equal to 0.21% for 2013, averaging just 0.18% for the 5 year period. It is clearly stated in its governance report that MYR 1,317,600 is paid to the Board and Investment Panel members and MYR 2,781,105 is paid to its Chief and Deputy Chief Executive Officers. A Pertinent Question Under its current investment mandate, the EPF can only invest 23% of its funds outside of Malaysia. Its domestic portfolio comprises equities, bonds, loans, deposits and properties. It is subject to less foreign exchange risk than GIC which has nearly all its assets invested overseas. Surely, there is a dichotomy between citizen’s retirement funding being in S$ and GIC’s returns being in foreign currencies which put CPF funds at risk to foreign exchange loss caused by the MAS’ exchange rate policy.  One would expect at least a proportion of its assets ought to be domestic.  But the valuable S$ GLC assets are in Temasek which states that it does not manage CPF monies. Should not the GLC assets be under GIC instead, to reduce the foreign exchange risk of CPF funds, or is the government keeping its most valuable assets to itself?  It is not difficult even for a layman to see the contradictions running through the entire CPF-GIC-Temasek set up, make even more contradictory by the MAS policy which produces a negative effect on overseas investment income. Conclusion The EPF is admittedly a different animal but the writer finds little to fault its set up in comparison to the multiple layers in Singapore. The point should already be made that although the EPF is no Norwegian GPF, it is still 4 goals to zero to Malaysia. In purely local context, Malaysia “boleh”, Singapore “tak boleh”. Chris K * Chris K holds a senior position in a global financial centre bigger than Singapore. He writes mostly on economic and financial matters to highlight misconceptions of economic policy in Singapore.  Read More →