Singapore: Courting Time for Singapore Inc.


Dr Michael D. Barr

Since the beginning of the 1980s Singapore Inc. has been developing its ‘external wing’: investments abroad that enable Singapore money and expertise to replicate the Singapore profit-making success story offshore. The project was envisioned as a benign form of imperialism that brought profits without the burden or odium of territorial conquest.

Ostensibly Singapore Inc. is well placed to go courting because it is cash-rich. It has many, many billions of dollars in public, private and semi-private money itching to find a good home. Private and public interests in Singapore are blurred: most of the top end of town has direct government links through shared personnel, intertwined money trails, or both.

This blurring has generally been advantageous to Singapore Inc. because the government-linked elite not only claims to be intelligent, but is well educated, highly motivated, ruthlessly efficient and basically honest. Lately, however, the connection is causing grief because very few people trust Singapore’s Government Linked Companies (GLCs) to act like normal companies. They expect them to act like arms of the Singapore Government, and the prospect of having the Singapore Government for in-laws is making it difficult for Singapore Inc. to find true love.


Singtel is the archetypal GLC. It is ostensibly just another semi-government telco like Australia’s Telstra, but it is run by the son of the former Prime Minister and the brother of the current Deputy Prime Minister. It is also 80 per cent government owned and the government retains a veto over all of its activities (a veto it is relinquishing to demonstrate Singtel’s supposed independence from the government).

Singtel tried courting Cable and Wireless Hong Kong Telecom last year and was rebuffed. PM Goh couldn’t understand why Singtel’s bid roused such high emotions. ‘Many intemperate things were said which I found quite surprising,’ he explained afterwards. The reason for the hostility, of course, is Singtel’s connection with the Singapore Government and with the Lee family. Now Singtel has proposed a merger with Cable and Wireless Optus, Australia’s second biggest telco, and once again finds the connection with the government is causing hesitation.

Singtel is trying to break the impression that it is part of the government apparatus, but it, along with other GLCs, will find that the impression is difficult to change while the reality remains.

The pattern of rebuffs goes far beyond the two examples mentioned here and goes far beyond Singtel. It seems that many prime investments will remain out of reach of Singapore Inc. because of the very nature of the beast. Singapore Inc. is likely to have to continue investing in enterprises like the Suzhou Industrial Town in China and Impulse Airlines in Australia (both of which were high risk and both of which have failed). It may even be driven back to concentrating its investment focus on its ASEAN neighbours, though this would be a strategy of last resort and seems an unlikely development in the short to medium term.

WATCHPOINT: It is an election year and the Singapore Government has announced that the problematic Suzhou project in China has finally turned its first operating profit. Wait for the books to be opened for inspection (but don’t hold your breath).


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AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

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