“WE’RE talking about billions of taxpayers’ money. I will not let this mistake continue,” said Dr Lee Wei Ling when she called for a review of Singapore’s costly biomedical strategy.
Describing the “scattershot” approach to drug research as spreading resources too thinly, the daughter of Minister Mentor Lee Kuan Yew wanted a more focused and less ambitious effort on a few areas the city can succeed in.
“At the end of the day I want biomedical research to benefit patients, and as a Singaporean I do not want taxpayers’ money to go to waste,” Dr Lee said.
Her criticism was levelled at Philip Yeo, the head of Singapore’s A-Star science agency and the project’s chief promoter. At some points the exchanges between them got a little heated.
For the moment it has ended with the government throwing its support behind the project.
“There are risks in this approach, but we have to do this,” Prime Minister Lee Hsien Loong said.
“If we succeed, we will gain competitive advantage that puts us ahead for 15 to 20 years.”
But the spat has served to highlight the increasing risks that Singapore is facing when investing its huge reserves to strengthen its future fundamentals.
Biomedical research is one such uncertain area where success and failure can be huge.
Traditionally, this industry requires expensive, long-term investment that could mean financial failure or medical breakthroughs that will greatly benefit the economy and mankind.
Two World Bank economists have said the multibillion-dollar biomedical industry had failed to yield any significant payoffs so far and had only a 50-50 chance of success.
Recent events have also drawn attention to the tough environment Singapore faces when it uses its large reserves to invest in the region to provide a reasonable rate of return.
Dr Lee, who is the head of the National Neuroscience Institute, is concerned that A-Star might lose billions if the biomedical research fails.
She’s not alone. Straddled by several poor investment decisions, Singaporeans are increasingly worried about their assets in government hands.
Some people are demanding more information and accountability on the use of the reserves, not necessarily a bad thing considering they are known to be an apathetic lot.
It also stems from several questionable investment decisions that could lead to mega losses.
An example was the purchase of Thailand’s Telco Shin Corp by Temasek Holdings, the state investment arm.
It is also under fire in Jakarta, where politicians want it to unwind its investment in communications giant Indosat.
Singaporeans have begun questioning whether Temasek had done sufficient due diligence before entering into politically sensitive deals across the region.
Many Thais consider Shin Corp a national asset, which was founded and 50% owned by ousted prime minister Thaksin Shinawatra. He is now under corruption investigation.
Apart from the potential losses – share values have dropped by half the US$3.9bil (RM13.6bil) it paid – it also led to a row with Thailand that has not been resolved.
The questioning of the reserves also stems from the increasing nature of today’s state investments.
They are bigger and riskier, often running into billions for a single project instead of the tens or hundreds of millions as was in the past.
Until now, investment was one area that the people had less to worry about than other countries. Since 1965, asset-building with prudent investments has been the government’s forte.
It is still largely successful over the long term; for every failure such as Shin Corp, there are several unheralded winners.
Singapore’s total reserves rose from US$75.8bil (RM265bil) in 2001 to US$136.6bil (RM477.7bil) last year, an 80% rise in six years despite the economic uncertainty.
But having to meander through today’s world of rapid changes is making sound judgment a lot harder to do. Sudden political and technological changes frequently upset the best of plans.
The secretive way with which Temasek (only recently did it begin to release annual reports) is managing S$90bil (RM314.7bil) of Singaporeans’ assets outside the purview of Parliament has added to the public worry.
In the 10 years to 2004, Temasek has averaged an unimpressive 3% annual return. The CEO is Ho Ching, the wife of Prime Minister Lee, who is also Finance Minister.
Totalling about US$140bil (RM489.6bil), the reserves are operated by the Government of Singapore Investment Corporation (GIC), chaired by Minister Mentor Lee.
He runs it with strong prudent hands but it has not escaped demands for openness and checks and balances.
A reader of the local papers said the reserves had been built up on the sweat of the people’s labour.
But the government, after saying that they were meant for a rainy day, had not touched them to help those badly hit by globalisation, he said.
“It is time to ask about those reserves. People who were born here and in trouble or in their twilight years should have access to these reserves,” he said.
A senior citizen agreed, saying the government should set aside some of the returns to pay a monthly stipend to those who are above 62 until they die.
Others decried the refusal of the government to set a target, which implied a continuing policy of budget surplus and higher indirect taxation.
“How do we know if these reserves even exist?” one cynic asked, criticising the lack of details.
The elder Lee, the man who built it all up brick by brick in a single generation, once assured Singaporeans that the money was in safe hands. National interests prevented disclosure, he said, but rest assured the GIC was focusing on “safe investments.”
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