Singapore to keep stakes in local economy
Singapore to keep stakes in local economy
Agencies, Singapore
State-run companies have been key to Singapore's success and
the government will keep its stake in parts of the local economy
though slowly reduce its involvement with time, the chairman of
the government's powerful investment holding company said
Wednesday.
S. Dhanabalan, chairman of Temasek Holdings, said the island-
state would not be so wealthy if the government had not formed
companies after independence in 1965.
The government will remain involved in the city-state's most
strategic companies while divesting stakes in others, he said.
The government is also venturing into high risk areas such as
life sciences, he said.
Singapore's government is involved in telecoms, banking, ship
repair, engineering, transportation, news media, financial
services, property, hotels, construction, and power and gas - to
name a few.
Critics have coined the term "Singapore Inc" to describe the
government's heavy involvement in the economy. But Dhanabalan
said that Singapore's state-linked companies, unlike many of
their counterparts elsewhere in the world, are well-managed, not
corrupt and offer good financial returns.
Some Temasek-held companies, such as DBS Group Holdings Bank,
Singapore Airlines, NOL and Singapore Telecommunications have
acquired foreign assets, fulfilling a key government aspiration.
"SingTel's done well," he said, referring to the regional
telecommunications player which recently acquired Cable &
Wireless Optus Ltd., Australia's second largest phone company.
Dhanabalan, also chairman of Southeast Asia's biggest lender
DBS Bank, maintained the government must remain in key sectors of
the economy.
"We feel that we should have control or influence over
projects with strategic importance," he said, citing Temasek's
primary objective in the next five years.
A second priority would be to "participate in high-risk growth
sectors" like biomedical sciences which Singapore is developing
to reduce the city-state's dependence on electronics exports.
The third area would be to "nurture" Singapore companies,
whether part of or outside its stable, to become regional and
global players, Dhanabalan said.
He said there was a need to keep interests in strategic
sectors, although not necessarily controlling stakes, because
Temasek wanted to "continue to have some insight into the
industry and into the company."
"Outside these, we will continue to reduce our participation
(in marginal operations) through our divestment policies
basically because we want to focus our scarce management
resources," he said.