Archive for July, 2009

Planning the next game for the nation

July 12, 2009

I refer to the Straits Time interview of outgoing EDB chief Mr Lim Siong Guan published on the 24 Jun 2009. In the interview, Mr Lim is said to have turned the table on his critics who accuse his bureau of being overly reliant on large MNCs for job creation and growth.

Mr Lim asks which MNC shouldn’t be here? A better question Mr Lim can ask is which MNC here could have been Singapore’s with the lion’s share of profits going to the republic? Mr. Lim asks which MNC is suppressing Singapore companies from coming up? A better question Mr. Lim can ask is what wonderful MNCs EDB might have come up with had it been earnest in developing them?

So by asking the wrong questions, Mr Lim sweeps away more important questions that are left unanswered. Mr Lim gives the example of oil refineries. This is a good example to support his case because you need to control the oil fields to control oil refining and Singapore doesn’t control any oil fields. However, he gives another not-so-good example of wafer fabrication which the Taiwanese have become very successful in. This is one example whereby Singapore may have had a fighitng chance but the EDB would rather be contented with receiving technology from other countries and hence playing second fiddle always.

Mr Lim refuses to believe that his agency has been wrong to gamble a sizeable share of the nation’s resources on biomedical science. Mr Lim says that his bureau talks to companies who then tell him what is good to invest in. If companies think that biomedical sciences is a sure bet winner, why would they bother to tell Mr Lim? Why not keep a good secret to themselves? If Steve Jobs relied on going around and asking people what kind of phones or walkmans they wanted, you can be sure that the world wouldn’t have seen the advent of the Ipod or the Iphone.

Mr Lim says he also talks to scholarship applicants. If scholarship applicants really had bright ideas and are entreprenuerial enough, they would have set up their own companies wouldn’t they? Finally, Mr Lim speaks to experts who supposedly can predict mega trends. Did any of these experts predict the recent worldwide financial crisis? So in the end, his agency is nothing but a call centre, making phone calls to strangers and saying “hi” to them. You wonder if you even need a degree to do that.

Mr Lim is right to say that we have to be at the forefront of this game so that others wouldn’t. But the question is: is this the best game we can play? How long can we play this game? Do we still play five stones when we are 40 years old? The game that we play has to change as we mature as a nation.

Mr Lim prides his agency for being the number one pleaser of MNCs. And so we remain a hostess forever, never a big boss.

Mr Lim rejects the argument that MNCs have hindered the development of local companies by saying that they are now highly interdependent. But being interdependent doesn’t say anything about the share of profits each gets from the value chain. The MNCs get to keep the lion’s share of profits in the value chain while the local companies get a measely fraction of those profits. Surely it would have been better for Singapore if the situation had been the other way round?

How can one possibly conclude that MNCs have staying power solely on the premise that 70% of new investments are from MNCs that are already here? If 90% of MNCs left Singapore, that means only 10% of MNCs stayed even if that 10% subsequently contributed 70% of new investments. So Mr Lim is giving a false impression of MNC loyalty by using a smoke screen measurement. What he is doing is akin to measuring the loyalty of new immigrants not by how many percent of them stay over time but by how much those who stayed contributed to our GDP.

Mr Lim asks where in the world can you hire a German, Chinese and Indian all in one office? I don’t see why that is such a big deal. I don’t see why you can’t have that elsewhere in the world. The German, Chinese and Indian can come together because they all speak English. But English is an International language spoken in many places. Since the whole world is learning Chinese now, very soon, the German, Chinese and Indian can all speak Chinese in any of the Chinese cities. So the concept of host to home is nothing but a namesake – cheap namesake.

Mr Lim says that the EDB should be judged on how well they draw in investments, which is the same game Singapore has been playing for the last 40 years or so. So do you judge a 40-year old on how well he plays five stones?

Mr Lim says that the day that Singapore doesn’t need EDB would be a good day for Singapore. I think it would be a better day if the EDB can finally create a truly world class MNC that we can truly call our own.

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