Cracks appear in Lee’s mantle
Shawn Crispin offers up incisive analysis and even prods at the CPF. Asia Times:
Prime Minister Lee Hsien Loong faces Singapore’s worst economic crisis since it achieved independence in 1965 and some analysts believe his handling of the downturn will determine largely his future staying power as premier once his influential 85-year-old father, Minister Mentor and national founder Lee Kuan Yew, eventually passes from the scene. …
Singaporean eyebrows also rose earlier this year when Temasek chief executive officer Ho Ching, the wife of Prime Minister Lee, announced she would step down from her post in October and be replaced with an Australian national. Temasek executives have said that her resignation is not related to the investment company’s recent financial performance, which in historical terms has tanked.
The sovereign fund shed 31% of assets’ value between April and November 2008, driving its portfolio down to US$127 billion, according to a Ministry of Finance report made to parliament. Some analysts expect even worse when the sovereign fund announces its total annual results, expected in the weeks ahead. The senior Lee was quoted saying in the local press that there was “no equal” inside Temasek to the outside Australian national candidate appointed to the post, but later backtracked on the comment.
The mentor minister’s flip-flop about Temasek’s top management capabilities struck some as odd, considering the sovereign fund had until recently claimed to have earned an average 18% in total annual shareholder returns. It’s notable in retrospect that the International Monetary Fund (IMF), in a 2006 report, inquired Temasek managers whether they “took into account the impact of its investment on the overall economy’s exposure to sectors and countries”. …
[Gomez] believes that the government’s fiscal strategy amounts to “cash handouts to mitigate criticism”, which, he concedes could still work in Singapore’s materialistic society. But Singapore’s wealth has recently greatly diminished, perhaps more than many realize, and as the global economic crisis bites deeper at home, it’s possible that desperate Singaporeans look to pin the blame on Lee’s government.
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Tags: asia times, cpf, ho ching, lee hsien loong, lee kuan yew, shawn crispin, temasek