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Cancer patient Lim Qing Si was one of thousands of hard-working Singaporeans who lost their savings in the financial crisis, especially when Lehman Brothers collapsed and its secured products became virtually worthless.
“All this money is my husband and my retirement savings,” said Lim, a 54-year-old retiree, who must now scramble together what’s left of her savings to pay for cancer treatment after a malignant tumor was found in her leg.
In all, nearly 10,000 people in Singapore stand to lose over S$500 million ($338 million) due to the collapse of Lehman Brothers Holdings Inc, the central bank says.
The incident left many financially scarred but politically awakened in a city-state where protests are rare and street gatherings of five or more people require a permit.
Lim and others have taken advantage of a recent government move to create a forum for public protest, a “Speakers Corner,” modeled on the Hyde Park bastion of free speech.
Since the financial crisis struck, hundreds of ordinary working-class people who have lost money have gathered each Saturday to air their grievances and call on the government to help recoup their losses.
“I hope the authorities, who are supposed to protect ordinary people, should be much more proactive,” said Tan Kin Lian, the protest organizer and a former chief executive of a large Singapore insurer.
Following the weekly protests, the central bank said it would investigate alleged mis-selling of Lehman-linked products, such as DBS Group’s “High Note 5” and Lehman Brothers mini-bonds sold by banks across the island state.
Singapore’s biggest bank, the DBS Group, was among the banks that sold Lehman products to its customers, many of whom were simple, working-class people looking for safe investments for their retirement savings in a country without state pensions.
DBS has said it will pay up to S$80 million to compensate some investors. Maybank also said it has identified mini-bond investors for compensation, while smaller financial institution Hong Leong Finance said it will buy back Lehman-linked mini-bonds from elderly and less-educated customers.
These offers may ease public pressure, but the discontent Singaporeans feel has shaken their faith in a government that espoused a pro-investment culture, analysts said.
Singapore, which has been ruled by one party, the Peoples’ Action Party, since its independence in 1965, has always been a promoter of investment, encouraging foreign firms to invest in the country and its compliant citizens to invest in their future by putting their savings in financial products.
Eugene Tan, a law lecturer at Singapore Management University, said the fiasco “puts the government’s credibility at risk” and the government had to be seen to do more.
“The Lehman bonds incident affected a very vulnerable segment of Singapore’s population,” said Tan.
The involvement of the largest bank DBS “made the issue very germane and very alive,” Tan added. DBS is partly owned by Temasek Holdings, which is a government linked company.
Government steps in
While the country’s marginalized opposition parties hope to take inspiration from neighboring Malaysia, where a resurgent opposition says it can win power after slashing the government’s majority in March elections, analysts said the chance this incident will snowball into a larger political rift is slim.
The turnout at the Lehman protests is a far cry from previous protests led by political opposition party leaders, such as a demonstration of about 20 people in March against rising prices, for which 19 people have been charged for illegal assembly.
“There is this very sharp contrast. When you have someone trying to draw Singaporeans attention to the politics of human rights, people are generally apathetic,” said Alan Chong, political scientist at the National University of Singapore.
“Singapore’s political culture tends toward pragmatism — this is largely a material pragmatism,” Chong said.
The government, which relies on domestic stability to help attract foreign direct investment and to develop high-value sectors such as financial services and biomedical engineering, has told the banks to resolve the matter fairly.
“Where there has been mis-selling, it has to be put right,” Singapore’s Prime Minister Lee Hsien Loong was quoted as saying in the Straits Times newspaper.
However, not everyone is satisfied by the response and the protests will continue, according to Tan’s blog: tankinlian.blogspot.com