Now in his 11th year in office, Singapore Prime Minister Goh Chok Tong is an economist by training and a politician by choice. Recently, he has been forced to defend the powerful Lee family: Senior Minister Lee Kuan Yew; his first son, Deputy Prime Minister and Finance Minister Lee Hsien Loong; second son, Lee Hsien Yang, CEO of Singapore Telecom; and Temasek Holdings Executive Director Ho Ching, Hsien Loong's wife. Breaking with precedent, Goh discussed the family's hold on business with Singapore Bureau Manager Michael Shari on May 29.
Q: Singapore's largest corporations are owned by the state, and their boards are filled with members of the Lee family, ex-cabinet ministers, and government officials.
A: You've got to bear in mind that we're a young nation. When I was a young man, I think about 3% of each cohort went to university, and I'm just 60. In other words, there were very few of us, [including Temasek Holdings Ltd. Chairman S.] Dhanabalan and myself.
Dhanabalan used to be a minister. When he retired, Deputy Prime Minister Lee had an episode of lymphoma. So I had to call Dhanabalan back. Later, we wanted to revamp DBS Bank. Who did we have? Dhanabalan, DBS chairman. And Temasek needs somebody, so Dhanabalan in Temasek has to look after Dhanabalan in DBS. The story is, we need to expand the pool of people.
Q: Since the Asian crisis, the government's goal has been to restructure government-linked companies (GLCs). Are you satisfied with the progress?
A: I don't think we're fully satisfied. I don't think the Temasek Holdings board is fully satisfied, which is why Dhanabalan wanted to appoint Ho Ching as chief executive officer. The idea is to give strategic direction to the GLCs.
Q: A number of people say the only real way to shake up these GLCs is to bring in a member of the Lee family--and that's why Ho Ching has the job.
A: The perception is there, I concede. That's a big problem politically for us. We've got to make sure that she can justify her decisions. Otherwise, we are all in trouble.
Q: But it's perception that matters.
A: Yes, I agree. But what do you do? Because of the perception, you don't appoint Lee Hsien Yang, you don't appoint Ho Ching, and any number of their relatives in high positions?
Q: When relatives of the senior minister and former cabinet members sit on the boards of the GLCs, does it make it difficult for the GLCs to be as profitable as possible or to restructure them as efficiently as possible?
A: It doesn't make it more difficult to restructure. Lee Hsien Loong, deputy prime minister, was heading a committee that oversaw the liberalization of the telecom sector when his brother was in charge of SingTel. They argued together that you need to open up the sector. And the brother has to make sure SingTel can compete.
Q: People look at the failings of some members of the Lee family and wonder if they really are the most qualified people. The most often-heard criticism of Ho Ching is her management of [state-owned electronics concern] Micropolis, which failed at the end of 1997.
A: But the criticism of Ho Ching and her management of Micropolis--you have to ask, is it fair? Who made the decisions? Was it the board? Was it the [executive committee]?
Q: And the most often-heard criticism of Lee Kuan Yew is that he is chairman of the Government Investment Corp. of Singapore, and that the GIC's rate of return has not been exactly stellar in the past few years.
A: When I took over as Prime Minister [from Lee Kuan Yew in 1990], I appointed him as chairman [of the GIC]. Do we have a better man than he in giving good returns on GIC? The answer is no.
Is the management the best in the world? I think the answer is probably not. Is it the best fund manager in the world? I don't think so. Is it the worst? I don't think so.
Q: In 1999, the heads of each division of [state-owned] SembCorp Industries were told that if they didn't meet new targets by the end of the year, it was curtains. But they didn't, and no one got punished. How does that happen?
A: I have no idea. But at the end of the day, when they go, who else comes and takes their jobs? You don't have such an abundance of
talent that you can say: "No good, out you go, put in somebody else."
Q: What legacy would you like to leave as Prime Minister of Singapore?
A: My goal was a very modest one. What I wanted to do was to keep Singapore going. There's life after Lee Kuan Yew.