Why did Ho Ching retire as CEO of Temasek when our GLCs are in limbo?

by Joseph Nathan

When Temasek announces that Ho Ching will be retiring as its CEO last Tuesday, critics had a field day bombarding Temasek, and for good reason.

Singapore already has a sovereign wealth fund “SWF” in our Government Investment Corporation “GIC” and Temasek was supposed to be just a holding company for our government assets, namely its equities in our GLCs, and public entities that were being privatized.

It has since been actively making investment that is no difference from our GIC, resulting in tiny Singapore having two undifferentiated SWFs.

Within the original Social Compact underpinning our Nation Building, Singaporeans were supportive of our government using our national saving during its early days as our reserve was low. The implicit understanding has been that Singaporeans will benefit from the success of Singapore and Nation Building was supposed to be a form of Dividend Play.

Fast forward, public housing is no longer a dividend-yielding investment and our CPF is not growing at the rate of our SWFs while the government conveniently goes silent with the original social compact it has with its people.

When the politically connected elites got to enjoy the Swiss standard of living, supplemented by probably the fattest pay-check of any politician in the world, it is clear that politics has divided Singapore needlessly, and for all the wrong reasons.

It is unsustainable when the working class continues to struggle with the high cost of living and when unions become business owners, articulating the voice of the government instead of arbitrating the plights and rights of the working class.

Comparative SWF – The Norwegian’s Model:

Norway has probably the most transparent SWF in the world. It is similar to Singapore in term of population and yet, it has no need to conceal information by classifying them as “state secrets” to stay ahead of their competition.

Like any SWF, Temasek has to provide third parties rating agencies with vital and sensitive information so that it can be risk-assessed, including those “state secrets”.

As such, when Temasek persistently cited “state secrets” in not disclosing information to concerned Singaporeans, the suspicion can only gain credibility over time.

Going forward, the Norwegian SWF has been actively ploughing back exceptional profit to augment the social safety net for its people, and that explains why Norwegians work exceptionally hard during their youth and are prepared to travel widely for the sake of their country. They probably have the Gold Standard for the best healthcare and retirement benefits in the world.

This is an exemplary model of what true Nation Building should be all about, and it did not happen by chance.

The Norwegians are both socially and politically active and their constant push on their government is to ensure that everyone, not just the working class, is working for the good of their country.

It is indeed a bitter pill for many elderly Singaporeans who had stood by the country patriotically during their younger days to be hearing that Temasek’s portfolio has grown from S$90 billion to S$300 billion under the leadership of Ho Ching when the majority of their CPF saving had remain stagnant, barely struggling to stay capital-positive after adjusting for inflation.

While the CEO-designate may be overly eager to give his former boss a glowing accolade, he has unwittingly throw salt on the wounds of the working class.

In the age of information, concerned Singaporeans are no fools and when they look at the comparative similarities and benefits between the Norwegian’s models against ours, it does not take a genius to deduct that Singaporeans, especially the working class, has been short-changed by our politicians.

But if the issue lies with the ruling politicians within our government, why are critics and concerned Singaporeans so angry with Temasek and Ho Ching?

The national saving of the working class of Singapore is managed by the CPF Board, a statutory board under the Ministry of Manpower.

If CPF Board had appointed an independent fund manager or a dedicated fund manager to manage our saving instead of lending them to the government or its SWFs at discounted rate, it is fair to state that our CPF saving would have grown by a much higher quantum than the rate offered by both the GIC and Temasek.

That would also mean that the majority of the working class of Singapore would be able to retire rather comfortably, like the Swiss standard of living, without the need of the government to provide them any handouts to them.

As such, by appointing Temasek instead of an independent or a dedicated fund manager to directly or indirectly manage our retirement fund, the perception is that the government had managed to profit from this arrangement, and credit is given to Temasek for helping to grow the country’s reserve (but at the expense of our CPF).

It also means that the transfer of public entities to Temasek at low valuation has not benefit the citizens but has propped up the operformance of Temasek’s and our GLCs.

Going forward, the billion dollar question has to be – why did Ho Ching choose to retire when our GLCs are in limbo?

Logic dictates that she should walk away only when our GLCs are doing exceptionally well.

Could it be that it will takes many more years for the Singapore economy to recover and that means that Temasek’s performance and those of our GLCs will be badly impacted for many years to come?

Or could it be that the government’s commitment of S$100 billion to fight climate change is instrumental and will be used by our GLCs and related entities to work their way out of their miseries?

If so, then it would be right for her to retire so as to avoid conflict of interest since her husband is the prime minister.

Then again, if this is proven to be true, what will the government be providing for our working class, our entrepreneurs and SMEs to weather the current economic hardship in their upcoming Budget given the dreadful economic scenario at hand?

It looks like Ho Ching has become an enigmatic figure, hard to interpret or understand, mysterious at time too.

She is in the government and yet she is not. She is in control of the establishment and yet she is not. Question is, will her retirement be an end of this enigma?

Maslow’s Hierarchy of Needs – Self Actualization for Presidency:

Given that Ho Ching was a high flyer, it is most unlikely that she will retire quietly into being an ordinary citizen. According to Maslow’s Hierarchy of Needs, a person of her status will most probably aspire towards self actualization.

Given her social status and achievements, what public office is there left for her to consider?

As the government has been actively tinkering with the criteria for the Elected Presidency, the number of qualifying candidate is already exceptionally low. If the tinkering continues and if she is left as the only candidate for the next presidential election, will Singaporeans give her a chance to become our Ninth President?

If so, will she use this office to correct the wrongs and missteps of the PAP government and shows Singaporeans that she is no enigma but is equally patriotic and concerned as any one of us?

I hope she still believe that Singaporeans deserve better…