Article 22 – When government and business mix

by Tan Thiam Hock

IT has been 11 days since I checked in. As promised, I have been diligently taking daily brisk walks along the Charles River. I walk fast because temperature at 6:30am is around three degrees centigrade.

It is difficult to jog with a lighted cigar in my hand but I do try to take in as much fresh air as my lungs could possibly allow. It is nice to feel alive.

During one of my earlier walks, I realised that I needed to unlearn first before I can learn new ideas. There was an urgent need to discard misconceptions about people, nationalities, business theories and ego. Living with seven other nationalities is a humbling experience especially when they are all very smart people.

Like Chip, our gentle giant from Georgia, southern United States. Soft-spoken, thoughtful and good natured, he is the complete opposite of the brash and overconfident personalities that I have encountered throughout my business life.

Then there is Mike, who is a senior director of a major UK chain foodstore, who believes in ethical and righteous business practices. Quite unlike other major buyers who tend to squeeze the life out of suppliers without compassion nor guilt. As I am still in disagreement with him, I did mention that it is early days yet, to judge a book by its cover. But the longer we debate, I feel like I am losing ground and his sincerity is winning me over.

From a US$12bil Thai industrial conglomerate, Khun Porn (which means blessing), with a PhD in chemistry, is the epitome of a loyal employee who would fight till the end for her employer.

Work ethics and good values that our young Asian employees should learn from. Henrik, the tall Dane is a serious hard working stereotype Scandinavian albeit with a twinkle in his eyes. Always with a smile, despite having to pay to his inland revenue a total of 62% of his income! Like Bhutan, money is not highly ranked in their Danish happiness index.

Our group is lucky to have Sean, a competent CPA from Kiwi land. Having honed his accounting skills from an early age by counting sheep, Sean is our group CFO, taking care of all our financial, accounting and valuation case studies. He is invaluable to our group. Talking about money, Vinod the humble entrepreneur from Mumbai is three years older and probably 300 times richer than me. With a great desire to learn new business theories, he prepared for this course by having three professors of finance, economics and business management running through the course materials with him at his home prior to his trip. As they say in India, knowledge is money.

We have Hammer, our special agent who is in the business of high security and protection of critical assets. We have found out that there is a conspiracy theory in every case study and we have learned to let him sit in the chair facing the door whenever we are in the restaurant. It is pretty cool to have our own bodyguard in the United States.

So this lipstick salesman completes the group of eight. Decent bunch of folks to live with for the next seven weeks. However, I am the only Malaysian among 169 participants. There are eight Thais and seven Singaporeans. Out of seven, four are senior directors from different Ministries and three from Temasek Investments. I was just wondering where are our boys from Khazanah and PNB? Then I realise that the general election must be just around the corner and all trips have been cancelled.

Singapore Inc currently controls 30% of the Singapore market capitalisation and such dominance across many industries has limited the opportunities available to entrepreneurs.

I wasted no time in having a debate with Singapore Inc (Temasek) over the role of government in business. Singapore Inc currently controls 30% of the Singapore market capitalisation and such dominance across many industries has limited the opportunities available to entrepreneurs.

How much of the Bursa Malaysia market cap do you think is controlled by our own sovereign national and state funds plus EPF? 20%? 30%? 40%?

I can understand when government agencies invest in key industries that is of national importance or in the name of national security. But private hospitals, private education and fast food industries?

How do private entrepreneurs compete with state public agencies? Just imagine another scenario where many government-linked companies and state agencies compete among themselves for little scraps of a project.

That would be come a day when small entrepreneurs would become an employee again.

In our case study, we learned how the Singapore government has proactively managed and build its economy since early 1960s till now. And how its many state agencies and its investment companies like Temasek have helped build the country.

So I asked the American Professor, “when I read your American economics and business text books 32 years ago, I was taught that, in a free trade economy, the Government should not interfere or participate in any business. But today it is obvious that Singapore Inc played a major role in the successful development of Singapore and Temasek Investment is the biggest shareholder in the total Singapore business. So what is your new teaching?”

He replied, “I did not write that text book.”

Until next week, happy learning.

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