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“Ring-fenced” is the term financiers are using to describe the tumult taking place in Las Vegas Sands (LVS), which means to say that LVS’ Singapore project, Marina Sands, will not be dragged down the drain even if the Las Vegas company goes bust.
Yes, like how Singaporeans were repeatedly assured that the Suzhou Industrial Park Project was in the pink of health right up until we packed up and handed over operations to the Chinese.
Ring-fenced or no, the lack of details on the loan to LVS is cause for worry. To be sure, the Singapore casino’s future hinges on the one in the desert of Nevada. If parent Sands is going to get mired in financial and legal problems – or worse, files for Chapter 11 – who is going to take care of baby Marina?
It looks like she may have to be fostered out to Madam Ho Ching. Bloomberg News reports that CapitaLand, owned by Temasek, is in talks to take over. Reuters reports that CapitaLand denies this.
Whatever. If Sands is blown away there is every likelihood that the Government will take over the project.
But even if the Government spends billions of our money to ensure that Marina IR is completed, there’s more than one way the casino can still become the world’s most expensive non-colour pachyderm.
For example, does anyone in Singapore know how to develop, much less run, a casino? If we did, we needn’t have engaged Mr Sheldon Adelson, owner of LVS, in the first place, right?
Wait, wait. But if Mr Adelson really knew how to run a casino, he wouldn’t be in this compost now, would he?
See the scatological hole the Government has gotten us into?
But up until now, the PAP-state continues to resist being upfront on the loans, its talks with Mr Adelson, and how the IR project will proceed. It insists that the casino resort will be open and ready for business by end of 2009. This is like the British saying that Singapore’s defence was impregnable even as the Japanese soldiers peddled across the Causeway during WWII.
So where does all this leave us? Very vulnerable. Our banks are the leading lenders to LVS: UOB coughed up S$890m, DBS S$743m and OCBC S$572m.
Add this to the financial crisis that is rocking the world and you start getting the picture – a very scary one. DBS’ retrenchment of 900 jobs is just the beginning.
Down the road
This brings us to the question: Is the PAP Government in over its head in continuing to target industries for our economy? Is its leaders hoodwinking us about the competence of its leaders?
Our economic questions in the past are very different from those in the present. Back then, there were few roads, no cables, and not many sewerage pipes. Solution? Build them. And it wasn’t difficult to see that the way out of poverty was to manufacture stuff like textile and TV sets and sell them to other countries.
But the PAP, aka Lee Kuan Yew, continues to think that just because it knew what to do then, it knows what to do now.
The game has changed, as if it needed to be said. The global economy has become extremely sophisticated and complex. Our economic problems cannot be solved by the few in the cabinet who pretend that they know which industries to target, be they building gambling dens or mapping genetic codes.
Nowadays we need to grapple with anything and everything from minibonds to migration. To tackle these problems, the people need to be involved in the building process. Without the energy and creativity of the people, our national and economic development will be anaemic at best.
And to be involved, they need freedom. Yes, political freedom. Because political freedom and the spirit of innovation are two sides of the same coin.
Thumb Singaporeans down, and you dumb Singaporeans down. Dumbing down a populace is not the way to an innovative future. When we cannot innovate, we cannot compete.
Right now our economy is smoking, injecting, and swallowing drugs. The state has become rich not because of the industry and enterprise of the people but because a few in the cabinet decided to change the law to attract the world’s super-rich people – some who made their wealth legitimately, many who would otherwise find themselves behind bars in their own countries. Incidentally, it is no secret that the IR casinos would allow even more illicit funds to be laundered here.
If Singaporeans haven’t realised it yet, the PAP is taking us down the wrong road. The Singapore Democrats have said this before: a government that has to rely on gambling to maintain economic progress is both entrepreneurially and morally bankrupt.
With the latest Sands meltdown, it looks like the chickens are coming home to roost.