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Dr Tony Tan is running on his record as an experienced hand when it comes to the financial world. He told the electorate that he would be the best candidate to handle an economic storm should one arise in the future.
“With my background in these areas,” he touted, “and with the knowledge which I have of the financial market, and the global economy, I believe that I will be able to make the contribution to and help the government and the ministers…to understand the situation better because I worked in these fields for the last 20 years.”
He continued: “I have intimate knowledge of all these areas. And it’s really because, if you like, I see the dark clouds over the horizon coming on…I feel that I was very comfortable in SPH and GIC.”
Let’s check to see how reality fits in with his rhetoric. The Singapore Democrats reported here that in December 2007 the GIC, of which Dr Tan was then deputy chairman and executive director, invested S$14.2 billion in Swiss bank UBS. Dr Tan lauded then: “In the case of UBS, they have a worldwide global wealth management business which is something not replicable by any bank.”
Two years later, UBS admitted to helping defraud the US Government and was fined US$780 million. It also greed to provide the identities of its suspected American customers and to cease its practice of serving customers with “undeclared accounts”.
Since then, the Swiss bank has written down more than US$50 billion and posted a loss of US$17 billion in 2008.
Either Dr Tan knew about the developments and problems that UBS was facing and chose to proceed by putting money into it anyway, or he had no clue that trouble was brewing in and around the bank.
Whichever it is, the incident does not back up Dr Tan’s boast that he is the experienced guardian with the ability to, in his words, see “the dark clouds over the horizon coming on.”
This is just the tip of the iceberg. The GIC admitted in 2008 that it had lost $70 billion in investments, much of it in investments in Western banks.
To be sure, the storm that was brewing within these financial institutions that subsequently wreaked so much havoc across the world did not come without warning.
Prior to the 2008 meltdown, billionaire financier Mr Warren Buffet had repeatedly warned that the financial games that bankers were playing were a “fool’s game” and called the players “madmen”. Other analysts like Dr Frank Partnoy and Dr Nouriel Roubini had also warned of the dangers of the international financial system. (See SDP’s report here)
Despite all these signals, Dr Tan and his colleagues at the GIC went ahead with the investments in these banks which, as stated, resulted in huge losses for Singaporeans and our CPF savings.
If Dr Tan missed the financial hurricane in 2008, despite all the thunder and lightning preceding it, how does he convince us now that he has the “background” and “knowledge” of the financial market to safely take us through the next storm?
This question must be on the minds of every voter when they walk into the polling booth next Saturday. Unfortunately, because the state media remains coy in giving this matter prominence, Dr Tan will be able to avoid answering the hard questions and a majority of the voters will continue to be kept in the dark.
Read also: Tony Tan is the problem, not the solution, Part I