the end of Singapore

The proposed sale of Income to Allianz is but a symptom of a greater disease

Out of the crooked timber of humanity, no straight thing was ever made.

When news broke of Income’s sale to Allianz, it started a rumbling of discontent online. The rumblings rose to a crescendo, with the voices of ex-CEOs of NTUC Enterprise Tan Suee Chieh and NTUC Income Tan Kin Lian joining in, and it was clear the PAP could no longer ignore these voices. So in the most predictable fashion, these questions were brought to Parliament where they were laid to rest, buried and hopefully forgotten.

The news cycle is a force of nature and the ebb and flow of daily news never stops, first the Olympics, then National Day, then the National Day rally, and what was once a roar now barely a whimper. Tomorrow, and tomorrow, and tomorrow has arrived; all the sound and fury now signify nothing.

The questions asked in Parliament were important ones, no doubt, but they were hardly the right one. The members were focused on whether Income could maintain its social mission, and whether the workers of NTUC Income could retain their jobs. Important questions, but not the right one. The time to cry about NTUC Income’s social mission is not now in 2024 that it is being sold away to Allianz, it was back in 2022 when it was corporatised from a co-operative to a company governed by the Companies Act. How could anyone ensure that a private company be beholden to any social mission, let alone a mission which could conceivably be unprofitable, when a company’s first duty is to its shareholders? Should the government be able to compel private companies to fulfil various social missions, especially when said social missions are not mandated by law? That boat has long sailed.

Enough has been said about the social mission that it seems pointless to continue flaying that dead horse: ultimately it comes down to a non-binding promise from a private company. In fact, as Minister Chee Hong Tat said in Parliament: in many cases, Income is no longer the most affordable insurance on the market. So it is questionable that the social mission was even being fulfilled.

The real question is how did NTUC Income end up in such a sorry state that the only solution was to sell it off to the highest bidder? The declining state of NTUC Income is not a new story. As the ex-CEO Tan Kin Lian lamented in a Facebook post: when he stepped down in 2007 Income had a market share in life insurance policies of over 20 percent in Singapore, today that number is under 10 percent. After several capital injections from NTUC Enterprise and the corporatisation of Income, NTUC Enterprise has thrown in the towel with the sale to Allianz.

The plight of the GLCs

How did it come to this? Income, while not exactly a Government Linked Company (GLC), could be said to be very much government adjacent. NTUC was recently designated as politically significant under the Foreign Interference (Countermeasures) Act. The board of directors for NTUC enterprises reads like a who’s who of the PAP and friends, and even included the speaker of the house Seah Kian Peng as the CEO at one point. All this is to say if the ruling party PAP is largely synonymous with the government of Singapore, NTUC Enterprises and by extension Income is at least government adjacent.

GLCs are companies which were partially or wholly owned by the government, but operated like a private company, motivated by profit rather than any kind of political aim. The Singapore government was adamant these companies would compete on the private market without preferential treatment from the state; without additional funding or political favour, these companies would compete on the open market, and through baptism of fire delivered by the invisible hand these companies would thrive or fail on their merits. The intangibles of being connected to government, an inside route to tenders and contracts, whether these factored into the success of the GLCs over the rest of the market, that is for you to decide. These companies enjoy a kind of incestuous relationship with government, where the management is a revolving door of ex-civil service and future politicians. At their conception, the GLCs could be argued to be necessary to a fledging country with no natural resources. But the road to hell is paved with good intentions.

How could Goh Keng Swee and his team have foreseen what the GLCs would become? These were supposed to be led by our elite class to create a foundation for Singapore’s new economy, providing services and products that no one else would invest in. We had to invest in our own country with our best and brightest. And by the 1990s the results were in - the GLCs were a massive success. On average, GLCs were trading at a premium of about 20 percent over other private companies. Whether by dint of their superior government connections (which were fervently denied to be untrue) or just because the stamp of approval from Singapore Inc. just made them so much more attractive to investors, GLCs had proven their worth to the country.

Today the story could not be more different. Singaporean exceptionalism, built on the back of a supposedly brutally meritocratic system which would promote the best elites to lead not just government but also industry through the GLCs, has often been touted by the PAP as the justification of Singapore’s success. Singaporean exceptionalism is dead, and it died with Lee Kuan Yew. Our GLCs no longer trade at a premium on the market, many of them are trading as penny stocks or have been re-privatised by the government. Some of these companies are tainted by corruption charges, and whatever justice we sought back home have ended with a slap on the wrist.

The elites of today are people plucked from civil service who have never seen a day in industry before being put at the heads of these GLCs. The embodiment of this phenomenon is Ng Yat Chung, a man who spent almost half his life in the military, and oversaw the ruin of not one, but two separate GLCs. SPH Media Trust (SMT), despite having a near monopoly on the local media landscape, reported its first ever loss under Ng, and in 2022 the government set aside S$900m in funding for SMT, breaking the promise of the Lee Kuan Yew era government that GLCs would not receive special funding from the government. Neptune Orient Lines (NOL), a homegrown successful shipping company saw losses under Ng, but in less than a year after NOL’s sale to a French company it would once again post profits. DBS Bank, which was incorporated by the Singapore government to fund many of our GLCs is today run not by a Singaporean born and raised in Singapore, but by a naturalised Indian national. Do not begrudge Piyush Gupta his successes in DBS Bank and in Singapore, but rather applaud him for saving one of our institutions, which is better than what can be said for many of our other GLCs.

Today, it looks like NTUC Income is about to suffer the same fate. A flailing government adjacent company that can no longer thrive under the model of “Singaporean exceptionalism” that has to be sold off to a foreign entity. The excuses are strikingly similar to the lines uttered by Ng Yat Chung during the sale of NOL, that the market had become increasingly competitive, and the companies could no longer keep up. There is no acknowledgement of any failure on the part of leadership, or any accountability for why these home grown companies built on the backs of Singaporeans cannot stand up to an increasingly globalised market. Perhaps they should be grateful that these are no longer the good old days, or that Khaw Boon Wan is no longer a Minister.

Trust in GLCs to perform are at an all time low, squandered time and again by the government. First it was the backing of Creative, which today trades at a fraction of its share price. Then there was the miracle of Hyflux and the Midas touch of Olivia Lum, who could turn shit into water. Many Singaporeans bought into the company on the confidence of the Singapore government and Singapore Inc, only to end up the bag holders while Temasek escaped unscathed, having divested its stake in Hyflux before the company collapsed. It is no wonder our stock market is in shambles, and that the Singaporean public has no confidence in investing in Singapore Inc.

If Singaporeans feel bitter about this experience, if Singaporeans feel that by buying NTUC Income shares at under market value of S$10 each and then selling those same shares (despite having promised not to do so) at almost a 40 percent premium at S$40.58 each there are some people in Singapore unfairly profiting off Singapore and Singaporeans, then we are told by the government we are wrong to feel this way. If only you worked harder, then you too would be in those positions to profit off the sale. As the philosopher once said: don’t hate the player, hate the game.

But when the only game in town is the government, when the biggest contracts offered in Singapore are government contracts, or when industry has been strangled by the existence of GLCs, where can the Singaporean turn?

It’s all connected

You might say: I don’t care about any of this. Why should I care about the failing local stock market? After all, I, the enlightened investor, invests not in the SGX, but in the the Vanguards and BlackRocks of the world, in the S&P500 and the FTSE. Why should I care about any of this?

You should care if you care about the future of Singapore. If you think there is something about being Singaporean worth preserving, that the culture and way of life is a place you would like your children to know and enjoy, if you think that your heritage as a Singaporean is worth passing down, and if you want to always have this little red dot to call home, then you should care. And most importantly, it’s all connected.

A failing stock market is not just vital to the health and economy of a country, but to the people. There will be no innovation, no enterprise, and no next chapter of the Singapore story if even Singaporeans do not want to invest into Singapore. It affects the prices of housing. If the surest way to get rich in Singapore is not through investment into the industry of this country but by playing the BTO lottery and laddering up the property chain, then that is where people will put their money. Already the prices of property are at record high levels, and do not seem to have an end in sight. There is too much money chasing an incredibly scarce resource, and the decision by the Goh Chok Tong government to turn housing into an asset is now reaping its natural conclusion. Is it really any wonder that the stock market is ailing? In a country where there is a perverse incentive to chase land as an asset, there will be no incentive to innovate in industry. To chase land in and of itself for its value will lead to a country where nobody will care to create services or products because owning land is simply easier.

If the only way for the government to continue growing the economy is by importing migrant workers and foreign talent, and the speed at which the government does this is without care whether these immigrants or foreigners can integrate with the greater Singaporean population, and without care if these immigrants see Singapore as a home or if they see Singapore as a stepping stone onto their next destination, then it is no wonder that some Singaporeans already begin to feel like strangers in their own country. It is not xenophobic or racist to point out that you wish to live in a Singaporean society, and that foreigners have to conform and integrate if they wish to be here. Otherwise what is the point of this being Singapore? But that is the hypocrisy of the PAP, such that our current Prime Minister can in the same breath acknowledge that there are integration issues while condemning others who dare question this as racist or xenophobic, all the while never admitting to the gaslighting that is on open display.

The combination of rising home prices and costs of living, coupled with a country in which Singaporeans increasingly can barely recognise, has led to historic lows in total fertility rates (TFR). Ironically this in turn leads the government to continue down this path of importing more and more foreign talent to make up the short fall of Singaporeans. This rapid replacement of the Singapore populace with people who have no wish to integrate into Singapore society and the rapidly falling fertility rates will eventually result in the end of Singapore as we know it.

Too little, too late?

The PAP are not blind to this reality. Already, as mentioned above, after gaslighting Singaporeans who saw the rapid increase in foreigners in Singapore as a threat to the social fabric, the Prime Minister has for the first time acknowledged the government knows there are integration issues. With the passing of the baton from Lee Hsien Loong to the 4th generation of PAP leaders, there is a noticeable pivot in the tone. Prime Minister Lawrence Wong cannot shut up about “refreshing” the “social compact” of Singapore, and with it follows the vagaries of it being about the journey and not the end, that we can find fulfilment in more diverse ways of living, and now more than ever we need to strengthen the trust among Singaporeans. It is a softer approach from the Lee dynasty, and it is a more consultative approach. Already steps are taken to right the ship and correct the course we are on.

In his first National Day rally speech, PM Wong addressed some of these concerns. Because the threat of an ever decreasing TFR is an existential threat to a country, especially one as young and small as Singapore without a large enough population or a strong enough culture to tide us over, every policy prescription has to be viewed in that lens - that to make Singaporeans want to have children here, to make any immigrant want to build their lives here and buy into the Singaporean way of life, it necessarily has to work towards making Singapore livable again. Simply put: stop running Singapore like a company and start running it like a country.

To that end, all the policies mentioned at the National Day rally were too timid to effect this change. The only one which even came close was the increase in parental leave, which was a small step in the right direction. As for the housing policy, it was disappointing to see that once again the PAP had opted to kick the can down the road to solve at a later date. Increasing the grants for HDB flats is merely a stopgap solution for this round of buyers to be able to better afford their houses. As the market adjusts, the grants that the government gives out will be baked into the price and the price will adjust upwards. Giving people more money to buy property just increases the prices of the properties. The proverbial can can only be kicked so many times down the road before it breaks down completely.

If the era of Lee “We decide what is right. Never mind what the people think” Kuan Yew would be defined by making unpopular but correct decisions, then the Lee “monitor the situation” Hsien Loong era would be defined by waiting at the sidelines till absolutely certain that their decisions would have no political consequences. It is still too early to tell where PM Wong would land, but between the overly timid housing policy, and the incredibly populist scrapping of the Gifted Education Program, things are not off to a good start.

It is of course unclear if Singaporeans have the stomach for the change needed to fix the housing system, or the change needed to reinvigorate the stock market. But the PAP has long sold itself as the party of doing the right thing, regardless of how popular it is, that to shy away from doing what is necessary now feels almost like cowardice. There is something to be said about how incredibly high salaries in the government could incentivise the maintenance of the status quo to retain those salaries for as long as possible, but that is a discussion for another day.

Some of these ideas are not new, and have been put forward before by either think tanks or Opposition, but as part of “refreshing” the “social compact”, these are some possible solutions:

1. A full reset on public housing - make all existing public housing sold by a certain date private housing and reintroduce new public housing with hard caps on the prices which properties can be bought and sold. These would fulfil the true intention of public housing instead of being assets to be speculated on.

2. A more controlled immigration plan which ensures that new Singaporeans are committed to integrating into the social fabric of Singapore, instead of treating Singapore as a stepping stone in their journey somewhere else.

3. Reduce the amount of GLCs and the size of government, and scale back on the reliance on MNCs, allowing Singaporeans to have space to create and fill the gaps in Singapore.

Just making these changes will be extremely painful for Singaporeans, and perhaps Singaporeans cannot stomach this pain. It is a dream of a different vision for Singapore, a more livable one, with better employee protections, and a government which gives people more freedom to live their lives. Perhaps the PAP are right in their estimation that it would be political suicide to attempt any change on such a scale. But the worry then is that the change is coming at too glacial a pace that by the time any change is put in effect, this country as we know it would have already ceased to exist, and that would truly be the end of Singapore.