AS A small economy, Singapore will have to find its own path forward in a new environment where there are many “dark clouds” over the horizon, said Prime Minister Lawrence Wong at an event on Monday (Sep 23) night.
“We have to stay open, be nimble and quick enough to seize new opportunities. And we must continue pushing for free flows of trade and investments, through regional and multilateral forums,” he said in a speech at a dinner to celebrate Singapore-based investment company Temasek’s 50th anniversary.
“As countries and companies everywhere look to diversify their exposures, and widen their range of partners, we want Singapore to be their choice partner. We want to be a reliable and trusted node from which they can operate.”
Among the 600 guests at the Shangri-la Hotel were Senior Minister Lee Hsien Loong, Deputy Prime Minister Heng Swee Keat, and many of Temasek’s Board members and senior management both past and present.
PM Wong said Singapore is currently operating in a “new era” that’s marked by the growing contest for dominance and leadership between China and the US – the world’s two largest economies.
While the two superpowers are continuing to engage each other, there is “deep mutual suspicion and mistrust” in their relationship, he added.
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“Neither side wants a conflict, but both are preparing for a conflict to happen. That’s why more and more economic activities around the world are being viewed through a security lens,” he said.
He pointed out that restrictions have already been imposed on key technologies such as artificial intelligence and semiconductors. What is worrying, he noted, was that security concerns have already spilled over to more areas.
“Once national resilience and security become the over-riding priorities, there will surely be many potential gaps and areas of vulnerability to address,” said the prime minister, citing the example of how many countries realised this during the Covid-19 pandemic when they were unable to produce enough masks, test kits and ventilators.
“No one wants that to happen again. No country wants to be a situation where their manufacturing capabilities grind to a halt because of shortages in certain critical components,” said PM Wong. “And the thing is, it’s very hard to tell beforehand which supply chain pieces will end up being the chokepoint.
As a result, there is more state interventions in business activities, and more attempts to reconfigure supply chains for security considerations, he said.
“Essentially, the pendulum of economic thinking has swung to the other extreme. The consensus of the late-20th century was all about free trade and laissez-faire economic management,” he said.
“Now we hear more calls for targeted protectionism and aggressive subsidies for key industries. Unfortunately, this trajectory will be with us for some time and will only lead to more zero-sum thinking in a more dangerous world.”
Foundation of success
In the finance industry, PM Wong said that investment professionals everywhere are always looking for “alpha” – the extra edge that drives higher returns and enables them to outperform market benchmarks.
“For Singapore, the greatest source of alpha lies in something more enduring – it’s our reputation for trust, integrity and reliability. These attributes are a unique source of competitive advantage for us. It’s very hard for others to replicate,” he said.
PM Wong expressed his belief that what is true for Singapore applies to Temasek as well.
The investment company, he said, is “very different” from when it first started 50 years ago, for the company now has deep expertise across many industries and markets, a stable of leading companies, and a wide network of partners and friends from all over the world.
But even as Temasek embarks on its next phase of transformation, he stressed that some things should not change – namely, the adherence to exemplary standards and values; the ability to think long-term, to grow with commercial and strategic discipline, and to add to the Singapore brand of quality, reliability, and integrity.
“These are the attributes for which Temasek is already well-known for, and which will ensure Temasek remains a valued and trusted long-term partner,” said PM Wong.
Earlier in his speech, PM Wong, who is also Finance Minister, said that the government has always been “careful” to not have any role or influence in Temasek’s investment decisions, with the approach being to hold the Board accountable for Temasek’s performance over time.
“But this approach has been possible only because we have people on the Board who are capable, and who can be trusted to work with the management to look after our long-term interests – to protect what we have inherited in Temasek, build on it, and pass it on to future generations in better shape than we started,” he said.
Bold and unprecedented experiment
In a separate speech, Temasek chairman Lim Boon Heng – who has been in this role for 11 years – described Temasek as a “bold and unprecedented experiment” when it was formed in 1974 as a holding company for the government’s assets.
“There was no map to follow, and hardly a compass to help guide our way. Yet, charting our own course, we survived and thrived. Today, we are a global investment company with a portfolio value of S$389 billion,” he said.
“Temasek is no ordinary company. Nor can it be. Just like Singapore, our survival lies in us being bold and extraordinary,” said Lim.
Midway through the dinner, PM Wong and Lim were among the VIPs to launch a new commemorative book that charts Temasek’s 50 years of history. The 300-page book is not for sale and PDF copies can be downloaded for free.
