Structural Inefficiencies caused by GLCs[Link]¶5. (C) Entrepreneurs continue to face obstacles in a number
of sectors in the form of Government-Linked Corporations
(GLCs), which account for nearly 60 percent of the national
GDP. Temasek Holdings, the government's investment
arm, is by far the largest investor in Singapore, with an estimated
50-percent stake in Singapore's GLCs. GLCs often compete
against each other in key markets, making entry by an
independently-held company difficult. For example, SingTel
and Starhub, both Temasek Holdings companies, compete
directly in the wireless service market and will soon do the
same in the cable television market. The strong GOS role in
directing the economy likely has the unintended result of
"crowding out" natural economic development, according Dr.
Sha Reilly, Chief Knowledge Officer at the National Library
Board (NLB), which has a mandate to encourage creativity and
entrepreneurship among young Singaporeans. She believes Singaporeans look first to the government, rather than the private sector, to be the innovation leader.
Again there is nothing new here but I just want to add that the elite-power structure has become intertwined with the GLCs which creates an extremely unbalanced system. If you traced the careers of top ranking officers in the SAF or civil service, very often they move to GLCs and a large number of MPs/ministers come from GLCs. Not only do GLCs have the effect of crowding out SMEs and stifling their development, the close relationship between the govt and GLCs has resulted in very unlalanced policies that serve to benefit these companies over the interests of ordinary Singaporeans. For example, even as corporate profits in GLCs reached record highs as a % of GDP, the PAP govt increased the GST from 3% to 5% ...then later to 7% so that they can cut corporate taxes for these companies shifting the tax burden regressively to ordinary Singaporeans at a time when the income gap and inequality is expanding. The PAP govt pandered to the demands of these businesses for cheap foreign labor reaulting in the highest per capita influx of foreigners among developed countries. All this done at the expense of Singaporeans many of whom saw their wages stagnant or falling while the cost of living rose. SMEs find it hard to compete with GLCs as GLCs have better sources of funding, contacts and are in a favored position when it comes to govt contracts. The long term outcome is a darth of homegrown businesses relative to places like Taiwan, S. Korea and Hong Kong.
The close association between business and the ruling elite has also led to unfavorable labor laws which over they years make it easy for businesses to 'hire and fire' with little or no compensation in the name of efficiency - very often such laws allow poor planning and lack of long term strategy that see businesses as workers can be treated as expendable resources. All this tuck under what is knows a tripartism a euphemism for compromising away the rights and status of workers. A union leader that tells workers to become cheaper, better and faster says it all. How does one's life become better if it is cheapened by PAP policies? It does not and an increasing segment of the populace works harder than ever yet cannot to make ends meet - the PAP govt keeps their head above water by giving out a supplement known as workfare - something known as slavery in some circles as it is only necessary when workers cannot enough when they are working and the govt supplements their income so that have just enough for necessities but nothing to put aside ...they will have to work forever as they don't make enough to retire. Today, 311000 Singaporean workers are on workfare[Link]....the consequence and tragedy of PAP's unbalanced policies is the emergence and rise of poverty in Singapore at a time when this country has more wealth than ever...more concentrated in the hands of the few.