I read with amusement the letter written to the State Times by one Francis Cheng arguing that Singapore MNCs should be allowed to pay bribes as otherwise foreign competitors will gain an unfair advantage. Since state media gives it such prominence we can assume that it reflects the thinking of the PAP Government. Certainly Singaporean GLCs have been discovered paying bribes with such frequency that it is clear that it must be official policy.

I wrote last week about how Keppel’s chairman and former PAP Minister, Lee Boon Yang, must have been aware of such large payments to foreign agents to bribe officials since they would have been factored in to the contract cost (A Shocking Window Into The Institutional Corruption That Pervades Singapore Inc). The amounts were also easy to identify since they were a percentage of the contract.

Neither is it possible that the PM’s wife, Ho Ching, was unaware of the practice since at least three Temasek companies have been identified as involved, Keppel, Sembcorp Marine and ST Marine. Which means that the PM almost certainly knew and quite possibly other members of the Cabinet including the Finance Minister.

Never mind the fact that paying  bribes is illegal under the US Foreign Corrupt Practice Act (FCPA) as well as most of the EU member states, the UK (the Bribery Act 2010) and many other advanced countries. Interestingly the FCPA requires non-US companies that have ADRs (American Depositary Receipts) to “have accounting and other internal controls in place to prevent and detect bribery and to accurately record and manage an organisation’s assets consistent with management’s directives“. Keppel’s ADRs trade under the ticker KPELY.

But let’s take Cheng’s argument to its extreme. Why stop at bribery? Surely Singapore’s GLCs should be allowed to engage in any form of illegal behaviour to gain a competitive advantage over their competitors. Why not make use of slave or prison labour? After all we already allow exploitation of foreign workers in Singapore with no minimum wage which undermines our own workers.  The justification for this is that otherwise our companies would be uncompetitive. Heading the list of those exploiting foreign labour are the same GLCs involved in the bribery scandal, i.e. Keppel, Sembcorp and ST Marine. Let’s wreck the environment in our poorer neighbours even where this redounds on Singaporeans as when it was discovered that many of the companies involved in the burning in Sumatra that created the haze were owned by Temasek.

Of course the same argument was used by LKY to justify paying huge salaries to himself and his ministers and to allow his family to make money on the side through their connections, as Mrs Lee did through her monopoly on HDB conveyancing. There was nothing wrong because in other poorer countries it was the norm for leaders to take bribes. If Singapore was to attract and retain talented leadership then the Familee and their cronies and ministers must be allowed to make millions. Never mind that the input from so-called leadership was fairly minimal compared to Singapore’s strategic position and the boom in world trade.

LHL continues the same practices. In order for Singapore to benefit from the fantastic stock-picking talent of his wife she must be allowed to make undoubtedly hundreds of millions through secret remuneration schemes. Otherwise other companies could lure her away and we could lose our competitive advantage. I presume Temasek’s internal controls are good enough for the company to know what Ho Ching is getting paid but given what happened at Keppel perhaps it would be unwise to presume anything.

No, staying clean is  not a simple matter and especially in Singapore.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam