MM Lee has gone to Russia to impress the Russians with PAP's success story. He was asked by a Russian business students what advice he would give if approached by 2 Russian presidents - one old and the other young:
".....'to get out of business' and not have the state run all major enterprises. Mr Lee said that it has been proven time and again that private companies are always more profitable and more efficient than state-run ones." - Straits Times, 20 Sep 2010.
In Singapore, GLCs (Govt Linked Companies) account for a significant portion of the GDP[Link]. GLCs are closely linked to PAP govt's power hierarchy. For example, when Minister David Lim left the govt, he went to NOL to replace the foreign talent who was then CEO. High ranking officers in SAF and govt transit to GLCs such as ST (Singapore Technologies), Semb Corp and so on. When the PAP needs new blood, it frequently looks for them in the GLCs e.g. MP Wee Siew Kim (father of Wee Shu Min) works in ST, and so on (here is an un-updated list to show PAP govt's link to businesses[Link]). The close association of the PAP govt with this network of GLCs causes the interests of the PAP govt to be aligned with a small group of power-elites and policy making to be lopsided trading off the interests of ordinary Singaporeans to maintain a power structure that preserves the PAP's hegemony. The PAP govt had to keep raising the salaries of ministers and MPs because they found it hard to bring in highly paid overcompensated GLC executives into politics.
It is strange, almost bizzare, for MM Lee to tell the Russian govt to "get out of business" when his own govt is so closely linked to a network of GLCs.
Sep 20, 2010
MM's take on a 'fantastical' scenario
By Jeremy Au Yong MOSCOW:
Imagine two Russian presidents, one young and one old, came to you and sought your advice on the next decade. What would you tell them? This was the scenario put to Minister Mentor Lee Kuan Yew last Saturday by Russian business school student Sergei Koltovich at a dialogue in Moscow.Mr Lee, while stating that the situation was fantastical, said he would give both leaders similar advice: Get out.'I would say to the older leader, get out of the communist system, shed it. Forget your empire. If you think you can re-create your empire, you are wasting your time and resources,' he said.To the younger one, his message would be 'to get out of business' and not have the state run all major enterprises. Mr Lee said that it has been proven time and again that private companies are always more profitable and more efficient than state-run ones.He said: 'If a man is hired by the state to run the company, his career is not at stake, the company succeeds or fails, his salary may go up and down slightly or he may get the sack. So if there's a crisis, he can go home at 12 o'clock and he's asleep. 'But if he has a 30 per cent shareholding, that night he'll be working frantically... he must solve the problem or lose his fortune.'The need to encourage private enterprise was a message Mr Lee would dwell on during his dialogue with the MBA students of the Skolkovo Moscow School of Management. He is a member of the school's international advisory board.Throughout the hour-long session, he was asked numerous times for his take on Russian issues.He told the students that the two reasons for his faith in the future of Russia's economy were the enormous amount of natural resources the country had, and the calibre of its people.But the people were being held back by a system that did not allow private enterprise to bloom and be supported by the government, he said.'If you discover an oil field, the government comes over and Lukoil says we will look after it. In that way, you control everything, that holds them back,' he said, referring to the Russian oil giant. Elaborating on the example, Mr Lee said that if the country was more open to letting foreign oil companies in, it could benefit from their expertise. American oil companies, in particular, were very good at drilling, he said.'If you open up the market, American oil companies like ExxonMobil, Chevron, they come exploring. Yes, they make some money but they discover new fields for you and ways to reach it. 'I think it's not in the Russian mindset, it's something that has to change if they want to grow faster,' he said.Mr Lee attended the meeting of the school's international advisory board yesterday as he wrapped up his visit to Moscow.He is in the Ukrainian capital of Kiev today and is due to meet Ukrainian President Viktor Yanukovych and Prime Minister Mykola Azarov.