The beginning of GIC and a tough 30-minute interview for GIC's first consulting team with then-PM Lee Kuan Yew

The Government of Singapore Investment Corporation (GIC) was conceived within a time span of just seven months: between 1 August 1980, when Dr Goh Keng Swee was appointed Chairman of the Monetary Authority of Singapore (MAS), and Feb 27, 1981, when he issued a press statement announcing the Government's intention to establish an investment company.

Among the first steps Dr Goh took on arriving at MAS was to commission a team from the Management Services Department of the Finance Ministry to "review the objectives, functions, organisation and operations of MAS and BCCS".

One of the areas Dr Goh had asked the team to focus on was how "MAS' investment expertise could be improved".

Another step Dr Goh took was to travel to Europe in September 1980 to meet central bankers and commercial bankers on the issues that had been raised in his interviews of MAS staff and by the MSD team.

One meeting in particular was especially productive: Dr Goh's reunion with his former London School of Economics tutor, Sir Claus Moser, then with Rothschild Bank in London.

In December 1980, the MSD team issued its report on MAS.

Though Dr Goh endorsed the bulk of the MSD report, Mr Herman Hochstadt, then MAS Deputy Managing Director, recalls him commenting that the report had "missed a very essential point", namely, that "there must be a separate body to manage the reserves".

Having come to that conclusion, Dr Goh set the wheels in motion for the formation of such a company.

In February 1981, the Rothschild team of Sir Moser, Mr Richard Katz and Ms Kate Mortimer arrived in Singapore to vie for a consultancy.

There were two rounds of interviews, the first conducted by a panel chaired by Dr Goh and including ministers who were to be directors of the new company, among them Mr Hon Sui Sen, Mr Goh Chok Tong, Dr Tony Tan and Mr S Dhanabalan.

The interview was searching and thorough, Sir Moser recalled. Dr Goh and he had become "rather close personal friends over the years", according to Sir Moser. They shared common interests like music and they would go to the opera together at the Royal Opera House in London whenever Dr Goh was in town.

But "there was no sign of friendship" at the interview; "it was bloody tough". Dr Goh led the questioning, quizzing the team as to how an investment company could be structured and organised.

After the interview, Dr Goh informed them that the panel had decided to appoint them as consultants but the decision had to be confirmed by the Prime Minister.

Dr Goh emphasised that it would be the Prime Minister who would have the final say on the appointment. The Rothschild team was scheduled to meet Mr Lee that same evening, at 5pm.

It would be an interview that each of the three would recall vividly. Ms Mortimer, in reminiscing about the interview with her friends, was reported to have said she felt "like a rabbit transfixed by a snake".

Mr Katz recalled that he was already a senior director at Rothschild by 1981 and had met an enormous range of people in authority by then. Yet, he too had been unprepared for the "very direct, very testing questions and the sheer incisiveness and ferocious intelligence" of the Prime Minister.

For Sir Moser, the interview would become inextricably linked in his memory with a boast that he had uttered in order to soothe the nerves of his colleagues as they entered the Prime Minister's office.

"I'm used to dealing with Prime Ministers", he had said breezily. He was to discover that his experience of British Prime Ministers Harold Wilson, Edward Heath and James Callaghan was no preparation for Mr Lee.

The interview took about 30 minutes and ended with Mr Lee telling the Rothschild team he had decided to appoint them for a six-month trial period.

The team had no doubt that it was Mr Lee who made the decisions. The three left the room "sweating" and "shaken". Both Sir Moser and Mr Katz acknowledged, though, that Mr Lee had been fair and civil. It was "absolutely right" that he had asked them these searching questions, Sir Moser was to recall 30 years later. Lee had impressed them "as a Prime Minister of a power and directness which (they) had never experienced".

On Feb 27, 1981, Dr Goh released a press statement. Embedded in the short statement were four profound insights, insights that would mould how Singapore has managed its reserves.

First was Dr Goh's allusion to the "regular" financial surpluses that resulted in balance of payments surpluses. Dr Goh would on other occasions use the term "chronic surplus" to describe Singapore's situation.

As Dr Goh saw it, Singapore would continue to have a high savings rate because of its tradition of prudent fiscal policy and the mandatory contributions all working Singaporeans made to their Central Provident Fund (CPF) accounts.

History has proven him right. The national savings rate in Singapore has ranged between 45 and 50 per cent of GDP over the last 30 years.

Second was Dr Goh's recommendation that the reserves be allocated to two "pots", or portfolios: one, to manage the Singapore dollar exchange rate and to back the Singapore dollar; the other, to be invested in long-term assets for capital appreciation. This distinction gave reserves management an extra degree of freedom.

Third was the decision to set up an investment corporation to manage the second pot, the "non-monetary reserves".

Singapore did not originate the idea of having an investment entity separate from the central bank, but it was nevertheless still regarded as an unconventional practice.

And fourth was Dr Goh's recommendation that the Prime Minister himself chair the Board of the new company. The company would have the distinction of being the only one in Singapore with ministers as its directors and the Prime Minister as its Chairman. That alone would signal the importance the Government attached to the endeavour.

As a result, over the years, ministers have acquired an appreciation of global financial markets and the returns and risks arising from investing.

This was precisely as Dr Goh had intended.

A nuclear attack by terrorists is not an impossibility

In Malaysia there is a real concern that IS fighters may attempt to build bombs with radioactive materials. Malaysian Police have recorded no less than 20 cases of radioactive and nuclear materials that have gone missing in recent years.

What is Singapore doing to beef up its nuclear security?

Since the first Nuclear Security Summit (NSS) in 2010, Singapore has tightened checks on radioactive materials passing through its ports, with every case of nuclear fuel transiting through Singapore being tracked.

At the 4th NSS in Washington DC last year, PM Lee said that from time to time, Singapore has intercepted cargo and confiscated items.

With the world becoming increasingly vulnerable to terrorism, a nuclear attack by terrorists using devices bought from the black market is “very plausible and believable”, and is a threat which countries must take seriously, Mr Lee said at the Summit in April 2016.

“Terrorism in itself is a severe problem. If it's mixed up with a terrorist who has some form of radioactive weapon or WMD (weapon of mass destruction), a nuclear weapon, nuclear bomb, that's even worse,” he said.

In addition to rolling out tighter controls to detect and analyse radioactive and nuclear materials passing through its borders, also cooperates with international partners such as the Interpol Global Complex for Innovation in Singapore, which fosters the sharing of data about transnational threats among countries.

Singapore also participates in the Proliferation Security Initiative – a global effort that combats the trafficking of weapons of mass destruction.

It also adopts the recommendations of the Financial Agency Task Force, which is an intergovernmental body that fights against money laundering and terrorism funding.

Fiscal Discipline

DO YOU KNOW?

Under the Constitution, the Singapore Government is required to keep to a balanced budget over EACH TERM of Government (5 years).

The Singapore Government does not borrow money to fund government expenditure. Hence, it does not have any external debt.

This practice of fiscal discipline ensures that government funds can be put into good use for Singapore's development in all sectors.

These are our finance ministers since 1959

The strength of our unions in representing workers

In an article attacking NTUC, activist Kirsten Han quoted Garry Rodan, director of the Asia Research Center at Australia’s Murdoch University, as saying that the Singapore worker has been left with no adequate representation because NTUC has failed to play an independent role in defining and representing workers' rights.

Such deliberate ignorance.

To make up for the lack of arguments, she included the 'million-dollar salaries' of ministers. 

But first, Garry Rodan. He is someone whose vocabulary to describe the PAP Government includes words like 'regimes' and 'authoritarian rule'. Enough said. You know where he comes from.

In October 2015, the director-general of ILO (International Labour Organisation) Mr Guy Ryder strongly endorsed the Singapore model of tripartism. He commented that 'Singapore has become a model to emulate.'

Industrial relations expert Sarosh Kuruvilla of Cornell University called Singapore "a classic example of a place where tripartism is deeply institutionalised". Singapore, along with Slovenia, has ranked highest in the strength of representation.

"I haven't seen the kind of commitment from top leadership (they have in Singapore) towards the concept in any other country," Prof Kuruvilla said.

NTUC today has moved beyond representing the rights and welfare of the rank-and-file workers to embrace more workers, representing the PMEs as well and helping even workers who are not union members.

It has moved beyond merely representing workers' rights to helping workers to upgrade and build their skills so that they can continue to enjoy good salaries.

"It is not about asking people to give us extra salaries and extra benefits just because we ask," said Mr Chan Chun Sing, who is secretary-general of the National Trades Union Congress (NTUC).

"It has to do with a lot of background work behind the scenes in trying to lift the productivity of our workers so that they can enjoy a good salary to provide for their families."

Such an idea is foreign to Kirsten Han. Her idea of an effective union is one that leads their workers in strikes.

Our unions work with post-secondary education institutes, institutes of higher learning and private service providers to increase the number of up-to-date training modules for workers.

At the same time, the unions also mobilise working people to make use of the available resources, such as the $1 billion worth of SkillsFuture Credit, to upgrade their skills and help themselves.

That's how workers' welfare and livelihood are being taken care of.

In transforming the Singapore economy into an innovative one, it is essential that the Government, the employers and the workers are all on board.

Good policies work only if they are effective. Companies cannot transform themselves without transforming their workers. The stronger the link between Government, unions and employers, the better.

Tripartism here is an asset and a strength, the envy of countries that have seen their workers having to take to the streets in, sometimes violent, protests to make themselves heard.

Tripartism here has resulted in mutual trust between employers and unions. Such a trust is good for workers.

At the May Day rally in 1960, then Prime Minister Lee Kuan Yew declared that the government was openly on the side of the worker.

"To be a good and effective union leader is no longer a matter of simply getting the workers to unite and fight the employer. And if the employer refuses to settle, then to squat and suffer collectively at the factory gate and hope to make the employer's business also suffer until he settles or closes down. For with the government on the workers' side this is not necessary."

"The strength of the workers is directly related to the supremacy of the Government," Mr Lee Kuan Yew said.

A close link between NTUC and the Government is a win for the workers.

Lee Kuan Yew: unionist at heart

The Singapore Population Swing: 2018 is turning point

Singaporeans “cannot have the cake and eat it too”. They have to make the choice – they either pay higher taxes if they want a smaller pool of immigrants or pay lower taxes and open the doors to immigrants, says UOB economist Francis Tan.

Singapore will cross the demographic Rubicon next year, when the share of the population who are 65 and over will match that of those under 15 for the first time.

By 2030, it is estimated that the percentage of people younger than 15 will fall to only 11% while that of those above 65 will reach 27% of the resident population.

That will put us in the similar situation as Japan today.

The implications are many.

Will we need more adult diapers than children diapers, more nursing homes than childcare centres, more geriatricians than paediatricians?

Economists interviewed said that unless the Republic loosens its grip on immigration, taxes would have to be raised in the near future as a result of the rapidly greying population.

The size of Singapore’s workforce will shrink resulting in lower contributions to the nation’s coffers from economically-active individuals while expenditure will go up from rising healthcare costs.

Maybank economist Chua Hak Bin argued that loosening the immigration policy is necessary to cushion the adverse effects of a greying population. “Raising the intake of working-age foreigners will help shore up growth and fiscal revenue, and reduce the tax burden on younger Singaporeans,” said Dr Chua.

In May, Defence Minister Dr Ng Eng Hen said that the pool of full-time national servicemen is expected to shrink by one-third in 2030. To overcome manpower constraints, the SAF has relied on technology and other initiatives such as the recently-launched Centre of Excellence for Soldier Performance, which was set up to redesign fitness training to enhance the potential of every soldier.

Singapore's rapidly ageing population

With a rapidly ageing population, healthcare expenditure will go up sharply.

Are we willing to pay more taxes so that the elderly in our midst can age in place and with dignity?

"WELL BEFORE THAT TIME COMES, we have to plan ahead, explain to Singaporeans what the money is needed for and how the money we earn and spend will benefit everyone young and old." - PM Lee Hsien Loong during the PAP Convention this year.

The message of a rapidly ageing Singapore is not new. But it's time we wake up to this reality.

Good planning far ahead of time will ensure that both the young and old can enjoy quality lives.