Three cheers for the PAP

In Corporate governance, Economy, GIC, S'pore Inc, Temasek on 07/12/2015 at 6:21 am

(Or “Why our GLCs work”)

Talking of the UK (where remember LKY and Goh Keng Swee and Toh Chin Chye- the trinity- studied. I’d describe Lim Kim San, from Raffles College, now NUS, as their archangel who did the work they ordered):

There were significant efficiency improvements in nationalising the postal system and the telegraph network, but the nationalisations of the 20th century were much less successful. This was in part due to the rise of trade unions and the move towards a fully democratic political system. While nationalised companies were left to be minded by technocratic-minded officials in the 19th century, politicians with their eyes on elections started fiddling with them in the 20th. Whenever politicians needed tax cuts to win elections they tended to hack back investment in state-owned firms. They also had a free hand to bloat their payrolls in order to help governments achieve full employment in the economy overall, protected by a system of tariffs and monopolies designed to shield them from competition. And trade unions started to demand excessive pay rises and oppose efficiency improvements, knowing that the state, as owner, would always pay the bill to avoid a fuss at election time.

Democracy? What democracy? Unions fighting for workers? What are they? Three cheers for elitism.

But this also rings true: parastatals like national airlines tend to be a handy way for government officials to dish out jobs to cronies. Neither the beneficiaries nor the benefactors of this illicit set-up want to ground the gravy plane.

(From anotther Economist blooger)

  1. Omitted to mention it was the prevalence of the old boy network that caused the downfall of many state owned firms back in the bad old days. The “English Disease” was not due to union militancy alone.

    Besides, even 3 cheers for the PAP does not mean win-win. Somebody has to pay for the champagne. State-sanctioned oligopoly for instance.

  2. Parastatals (or is it parasites??) like NOL, SMRT, SBS, Comfort Delgro, S’pore Power, SingTel, DBS, PSA, Surbana, SembCorp, JTC Corp, Ascendas, Mapletree, Keppel Corp, ST group, restructured hospitals. And don’t forget the 1001 stat boards, most of which operate like parastatals themselves, except without having to produce audited profit & loss statements. From own personal experience and anecdotal accounts, mgmt and senior executives gain much more than shareholders or Sinkies. It is indeed rewarding to polish the arses of the PAPies. Hahahaha!

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