‘Not realistic’ for GIC to avoid making any losses

Dear Mrs Lim,

I refer to your comments in parliament as reported by Straits Times on 10 Mar 2010.

Your said it is not realistic to avoid losses on every investment (that GIC makes). But that is not the issue at hand. The issue is the magnitude of those losses versus the supposed talent that GIC has. What value are we getting from these so-called talents for the millions they are paid versus the billions they have lost? How much worse would a school boy fare throwing darts to pick investment alternatives?

You said the GIC will not be judged on individual deals but on overall performance. But individual deals do affect overall performance. If we don’t improve on individual deals, especially the spectacularly bad ones, it means we are not getting the best overall performance we should be getting. The stakes in the financial market are ever higher now and a lot more devastating too. The Barings Bank is one good example of how individual bad deals can bring down an entire financial institution with centuries of history behind it. Surely we would not want individual bad deals to wipe out our nation’s golden goose?

We cannot accept the so-called creditable returns by GIC and Temasek over the long term without the means to actually verify them thoroughly given the lack of detailed information concerning their investments. This is perhaps the reason why we are left to criticise individual spectacular losses given their ascertainableness.

Mr Singh’s suggestion that it is timely for the GIC and Temasek adopt a more conservative mandate should not be construed to mean an immediate, knee-jerk reaction to the recent downturn but a timely reminder that their role is to protect the nation’s golden goose and not to endanger it regardless of what courses of action they might undertake at the moment.

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2 Responses to “‘Not realistic’ for GIC to avoid making any losses”

  1. The Singapore Daily » Blog Archive » Daily SG: 15 Mar 2010 Says:

    […] GIC, Temasek State Fund Investments – The Asia File: Temasek’s Malaysian governance problem: what happened next – Yours Truly Singapore: ‘Not realistic’ for GIC to avoid making any losses […]

  2. The Singapore Daily » Blog Archive » Weekly Roundup: Week 12 Says:

    […] File: Temasek’s Malaysian governance problem: what happened next – Yours Truly Singapore: ‘Not realistic’ for GIC to avoid making any losses – The Grand Moofti Speaks: Singapore, Temasek, good governance and the Linaburg-Maduell […]

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