GIC must be bold in investing, says MM Lee
By Rachel Chang
THE Government of Singapore Investment Corporation (GIC) must have the courage and conviction to continue taking 'bold, strategic and forward-looking' investment decisions, says Minister Mentor Lee Kuan Yew.
Speaking at GIC's 30th anniversary celebrations at Shangri-La Hotel last night, he harked back to its founding in 1981, noting that these were the very qualities that brought it into being.
When GIC was first established, the idea that a country should manage its reserves for long-term returns was unconventional: 'Some even considered it irresponsible to invest our foreign reserves in risky assets like equities.'
Today, many countries have followed suit and established sovereign wealth funds of their own, he noted.
He highlighted GIC's willingness to embark on new strategies and take calculated risks as a key strength, pointing to its early moves in real estate and emerging markets such as the South-east Asian economies and China.
But Mr Lee warned against the growing impetus to 'follow conventional practices' as GIC grows larger and more established. 'This could lead to mediocrity. GIC must develop the capacity and courage to make the right decisions, thinking in depth and foresight for what works best for us, even if the decisions are at times unconventional,' he said.
Mr Lee noted that the next 30 years would be challenging and uncertain, citing especially the rise of emerging economies, which would change geopolitical dynamics and put pressure on natural resources and the environment.
Besides remaining bold, he said, GIC had to continue to pursue excellence, avoid complacency and maintain 'the highest reputation, conducting itself in a manner that is beyond reproach'.
'This is a key strength of GIC, given the various possible conflicts of interest that have been revealed by the global financial crisis,' he emphasised. He also lauded GIC as 'vital to Singapore's national interest'.
Singapore is highly exposed to the vagaries of the global economy, and the national reserves are a buffer or a shock absorber for Singapore in times of crisis, he pointed out.
In 2009, for example, the Government took $4 billion from the reserves to fight the economic crisis with initiatives such as the Jobs Credit programme - a subsidy to employers for each local worker, in order that they not retrench staff.
The strong national balance sheet also fosters investor confidence, and enhances the stability of the Singapore dollar.
'The results speak for themselves,' declared Mr Lee. Over the last 30 years, the purchasing power of Singapore's reserves has outpaced global inflation by a comfortable margin, he said.
By Rachel Chang
THE Government of Singapore Investment Corporation (GIC) must have the courage and conviction to continue taking 'bold, strategic and forward-looking' investment decisions, says Minister Mentor Lee Kuan Yew.
Speaking at GIC's 30th anniversary celebrations at Shangri-La Hotel last night, he harked back to its founding in 1981, noting that these were the very qualities that brought it into being.
When GIC was first established, the idea that a country should manage its reserves for long-term returns was unconventional: 'Some even considered it irresponsible to invest our foreign reserves in risky assets like equities.'
Today, many countries have followed suit and established sovereign wealth funds of their own, he noted.
He highlighted GIC's willingness to embark on new strategies and take calculated risks as a key strength, pointing to its early moves in real estate and emerging markets such as the South-east Asian economies and China.
But Mr Lee warned against the growing impetus to 'follow conventional practices' as GIC grows larger and more established. 'This could lead to mediocrity. GIC must develop the capacity and courage to make the right decisions, thinking in depth and foresight for what works best for us, even if the decisions are at times unconventional,' he said.
Mr Lee noted that the next 30 years would be challenging and uncertain, citing especially the rise of emerging economies, which would change geopolitical dynamics and put pressure on natural resources and the environment.
Besides remaining bold, he said, GIC had to continue to pursue excellence, avoid complacency and maintain 'the highest reputation, conducting itself in a manner that is beyond reproach'.
'This is a key strength of GIC, given the various possible conflicts of interest that have been revealed by the global financial crisis,' he emphasised. He also lauded GIC as 'vital to Singapore's national interest'.
Singapore is highly exposed to the vagaries of the global economy, and the national reserves are a buffer or a shock absorber for Singapore in times of crisis, he pointed out.
In 2009, for example, the Government took $4 billion from the reserves to fight the economic crisis with initiatives such as the Jobs Credit programme - a subsidy to employers for each local worker, in order that they not retrench staff.
The strong national balance sheet also fosters investor confidence, and enhances the stability of the Singapore dollar.
'The results speak for themselves,' declared Mr Lee. Over the last 30 years, the purchasing power of Singapore's reserves has outpaced global inflation by a comfortable margin, he said.
