Sir, in this financial crisis, Singaporeans are naturally concerned about the health of our reserves managed by GIC and Temasek.
According to reports, Temasek invested nearly US$6 billion in Merrill Lynch which is now worth about 20%. It has large paper losses in Standard Chartered and Barclays. GIC’s investment in Citibank of US$6.9 billion may now be less than 20%.
Last Oct, the Finance Minister discussed the government’s stance on transparency of GIC and Temasek as follows: “public disclosures had to be shaped by the SWF’s characteristics as long-term investors, with the ability to… ride out cycles. A short-term focus in financial disclosures would…not shed light on the right areas.”
However, the government is but the legal trustee of the funds and the ultimate true owner is the people. They deserve to know how this turmoil has affected our national wealth. Can the government tell us how much paper losses have been incurred? How have these losses affected the liquidity of the funds and their ability to take opportunities in the downturn? Does the fact that both funds invested so heavily in the financial sector at the same time undermine the diversification objective for our sovereign wealth?
(Note: this speech was delivered in Parliament on 10 Feb 2009.)
