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    Temasek CEO Ho Ching (centre) at the ABLA dinner, flanked by (l to r) Chong Lee Tan, Head of Europe, Temasek; Stuart Gulliver, Group CEO HSBC Holdings; Sir John Peace, Chairman of Standard Chartered; Paul Manduca, Chairman, Prudential; and Michael Lawrence, CEO, Asia House.
    Temasek CEO Ho Ching (centre) at the ABLA dinner, flanked by (l to r) Chong Lee Tan, Head of Europe, Temasek; Stuart Gulliver, Group CEO HSBC Holdings; Sir John Peace, Chairman of Standard Chartered; Paul Manduca, Chairman, Prudential; and Michael Lawrence, CEO, Asia House.

    Temasek aims to do the right things with future generations clearly in mind

    Published On: 28 October 2014

    Ho Ching, the Executive Director and Chief Executive of Singapore sovereign wealth fund Temasek, received the prestigious Asia House Asian Business Leaders Award at London’s sumptuous Banqueting House.

    The head of the S$223 billion global investment company told a glittering dinner attended by over 250 senior business leaders, politicians, diplomats and opinion formers how Temasek’s development was shaped by Singapore’s post-colonial drive for survival,  prosperity and sustainability.

    Interior of Banqueting House at ABLA dinner

    London’s sumptuous Banqueting House hosts the 2014 Asian Business Leaders Award dinner

    To watch a video of the Asia House Asian Business Leaders Award 2014 click below:-

    Read the full text of Ho Ching’s acceptance speech below:

    I am very happy to be here tonight in this historical and very beautiful building.  Although it’s been associated with some interesting events in the past in Britain[1].

    First, let me thank the Trustees of Asia House for their kind and gracious award.  I am very much honoured to accept it as a recognition of Temasek, and more importantly, the Temasek team, past and present.

    As you know, I come from Singapore: it’s a small island!  So I thought, as we relax among friends this evening, please allow me to share a little of the story of Singapore and Temasek with you.

    A Humble Beginning

    Singapore was already known in the second century to the Roman-Greco world as a trading post[2].  Ptolemy named it Sabana.  Third century merchants from China called it Pu Luo Zhong[3] – the Island at the End.  This little island is much, much smaller than Britain, the island at the other end of the world in the west – in fact, Singapore is less than half the size of London[4].

    In 1819, nearly 200 years ago[5], Sir Stamford Raffles took over Singapore toward the tail-end of the Anglo-Dutch spice trade tussle in the Far East.  This little island trading post grew quickly, and Singapore was soon firmly anchored into the British Empire by the Anglo-Dutch Treaty of 1824[6]: seems very long ago!

    Fast forward another 120 years to the end of World War II in 1945.  Britain began to devolve its colonial powers through various forms of self-government around the world.  The first Singapore municipal elections were held in 1948.

    Some 11 years later, in 1959, Singapore was granted its first full, internal self-government, with her own Head of State in place of a British Governor.  Defence and foreign affairs remained under British charge, with the headquarters of the British Far East Forces centred in Singapore.

    Sir John Boyd, Chairman of Asia House, welcomes VIPs and guests at the Asia House ABLA dinner

    Sir John Boyd, Chairman of Asia House, welcomes VIPs and guests at the Asia House ABLA dinner 

    The newly elected Singapore Government of 1959 soon discovered – to their utter dismay – that they were staring at a budget deficit of some S$14 million for the year. The government kitty had also been emptied by their predecessor government[7], to the tune of some 10% of the island’s GDP of a quarter billion pounds[8].

    The newly minted Prime Minister and his new finance minister went to work with a vengeance.  They cut their own salaries by almost a quarter; allowances of top civil servants were also reduced.  Projects were shelved.  It was an all-out effort and push to reduce the deficit for the year.

    It was not an easy time.  Emotions ran high, as you can imagine, with this unprecedented salary reduction.   But, logic and example prevailed, and the civil service pulled together.

    By the end of the year, the Finance Minister reported a surplus of S$1 million.  This surplus in the first year of self-government set the tone and timbre for fiscal prudence and budget discipline for successive governments to come.

    Next came the 1965 crisis, or nationhood development. This time, Singapore found itself bereft of a large hinterland overnight, after the short lived merger with Malaysia.  This left the tiny and newly independent nation, scrambling and scrabbling for a living and for living space.  Per capita income was all of S$ 1,600, or £184[9] in those days.  Average life expectancy was a little over 64 years.

    But troubles never come singly.  In late 1967, barely two years into Singapore’s independence, Britain – facing her own financial crisis – decided to cut spending by withdrawing her military forces east of the Suez by 1971.

    The British forces in Singapore were not just a security umbrella for trade to flow freely through the Straits of Malacca through the east.  They also accounted for some 20% of Singapore’s GDP, and were the largest single source of employment on the island.

    No wonder few in those days gave Singapore any odds to survive on her own. It had, it has, no mineral wealth, little water and no hinterland to speak of.  It was a trading post, dependent on entrepot trade, with almost no industries. And 20 per cent of its GDP, as well as jobs, would soon be gone.

     A Fight for Survival

    A massive manpower conversion programme was started immediately to train base personnel for new jobs.   Swamps were drained to make a new industrial town for factories, to make up for the withdrawal of the British forces.

    Young investment promotion officers were soon button-holing dinner guests in the Philippines, USA, Japan, in Britain itself and in Europe to invest in Singapore.   The Government was prepared to provide loans or put in risk capital as a co-investor to encourage the likes of Cerebos, a chicken essence producer from the UK, to start up plants and create new jobs for her people.

    British naval dockyards were converted into ship repair yards, so that workers could retain their jobs.  Military electrical workshops were transformed into electrical services companies.

    Yet, in the midst of the desperate drive to attract investments and create jobs, Singapore saw how choking pollution and tearing smog were engulfing cities in USA, like Los Angeles, in Europe and Japan.

    And so in 1970, barely five years after independence, Singapore set up an Air Pollution Unit, reporting directly to the Prime Minister.

    The Government was prepared to lose investments which didn’t comply with the standards for clean air.  Even as we strove for survival, we wanted to make sure we didn’t pollute or despoil our air, water and land for our people and our future generations.

    Our resolution was tested early.  When Singapore was bidding for a petrochemical investment, against strong international competition, the Government required the potential investor to install scrubbers to minimise pollution, even at the risk of losing that investment.  The scrubbers were duly installed.

    When 1971 arrived, the island hummed with companies, big and small. Factories, local and foreign, were busy producing for the world.   There was no massive unemployment from the British pullout.  And so, there was a collective sigh of relief.

    That year, 1971, also saw our first annual Tree Planting Day – it was a symbolic, but also very important, commitment to keep our environment clean and green.  Industrialisation, in our minds, was to go hand in hand with green, beautiful nature for our people and children.

     An unplanned birth

    Nine years into independence, as Singapore emerged from the series of crises, the Government found itself to be an owner of a smorgasbord of companies.

    Government loans for businesses had already been spun out earlier to form the Development Bank of Singapore, today, DBS, the largest bank in South East Asia.

    It was not the business of government to be looking after shares and investments in businesses and companies.  These ranged from minority shares in a hotel to a wholly owned Bird Park; from a co-investment in a commercial detergent maker to an innovative open-concept zoo as a wholly owned public good.

    And so Temasek was formed in 1974, to take over this mixed bag of companies and investments, from a golf shoemaker to Cerebos, the chicken essence producer from the UK.

    Singapore skyline. Photo by Tim Allen

    Singapore skyline. Photo by Tim Allen

    The Temasek DNA

    While Temasek didn’t start with a blue print or a grand master plan, its very name – Temasek[10] – was an old name for Singapore.

    The ethos of Temasek was already shaped at birth by the post-war history of Singapore – to live within our means and be financially disciplined; to do the right things with tomorrow clearly in our minds, particularly for our future generations; to make sure that our drive for survival and prosperity go hand in hand with a respect and a nurturing of a clean and green environment for our people.

    From the start, the Government took a hands-off approach to Temasek.  Subsidies were most definitely out of the question.

    Companies in our portfolio were allowed to fail, as the golf shoemaker did subsequently.  Neither Temasek nor the Government would be there to bail them out.

    With that accountability came the responsibility to make their own decisions.  The Government – and it took discipline on their part – played no part in the commercial decisions of the companies.  And likewise Temasek.

    Take Singapore Airlines for instance, or SIA, as we call it in Singapore.  From day one, SIA knew it had to innovate and compete internationally, or fold – after all, there was not much domestic air traffic opportunity for an island which is all of 30 miles at its widest span; just a little further than a marathon run!

    SIA never had to ask Temasek, much less the Government, whether it should buy Boeing or Airbus planes, or whether it should add or withdraw capacity from particular routes – SIA made its own commercial decisions as an airline company.

    Few of its international competitors in the airline industry operate with such commercial independence, away from Government subvention and influence – even today.

    The greatest gift, at birth, from the Singapore Government to SIA was to help negotiate with the British Government then for air rights.

    Indeed, SIA’s success today owes much to the UK Government’s early approval for it to fly to London at its very start.

    The second gift from the Singapore Government was to run a clean and lean government, and an efficient economy that is well plugged into the global market.

    And so SIA had the freedom to become a global pace setter – it changed the norms and standards for airline travel. If I remember correctly, it was the first airline in the world to offer free alcohol on flights.  And so, SIA managed to thrive and grow with Singapore.

    Singapore Airlines is but one of the many examples of our portfolio companies that have succeeded through innovation and sheer determination, and not state support.   Many of these companies grew with Singapore’s transformation, and Temasek grew with them.

    The path had not been always smooth.  Whenever economic storms threatened, management in Temasek set an example by reducing their own salaries, no different from what the first self-government of Singapore did.

    The most recent was during the global finance crisis of 2008: Temasek senior management volunteered cuts of up to 25 per cent, while junior staff took smaller cuts[11].  It was a show of solidarity to be ready for rough weather.  But it also served as a sharp, quick signal to the rest of the Temasek portfolio companies in Singapore to be prepared for very rough weather ahead.

    It was this collective drive for survival, and a commitment to the long term that enabled Temasek and the Temasek portfolio companies to survive and thrive.

    And the old British naval and harbour yards?   The two competing yards, one a former naval dockyard, and the other a former harbour board repair yard, have today become the leading deep water rig builders in the world.

    They built the three rigs which successfully plugged the oil gush of the 2010 Gulf of Mexico spill[12].  One of them, Keppel Offshore and Marine, based just one degree north of the equator, also built ice breakers for Russia’s Arctic operations!  I found that very interesting.

    The Spirit of Temasek

    Friends, ladies and gentlemen:
    This year, Temasek is celebrating its 40th anniversary.

    We have tried to capture the spirit of Temasek in our Temasek Charter – as an active investor and long term shareholder, as a forward looking institution and above all, as a trusted steward.

    Meritocracy and integrity, as Stuart [Gulliver][13] has mentioned just now, are our watchwords.  We invest in businesses which operate and compete effectively for the long term, and not take short cuts at the expense of the community at large.  These ideas and ideals influenced our thinking from the earliest days about our roles and responsibilities for the long term.

    For instance, we puzzled over how we can foster an owner’s mindset in Temasek.  We mulled over various ideas, and decided some ten years ago to introduce deferred compensation plans, linked to risk adjusted returns.

    For our senior folks, a substantial part of our bonuses and incentives are deferred for as long as 12 years, or about two business cycles.  This aims to foster a long term ownership mindset.

    If the returns are not sustained, we share negative bonuses – in other words, bonus claw backs.  In so doing, we try to align interests and behaviour towards long term ownership.

    We engage our portfolio companies and other stakeholders around the world, with a view to fostering good governance.

    These are unusual disciplines to which we subject ourselves in order to build the institution for the long term.

    Trusted Steward

    Underlying all these various systems and initiatives is the idea that we work for a better tomorrow, as a responsible and trusted steward.

    Businesses do not exist in isolation from the society or their communities, nor the forces that shape us all.

    Much like Britain had supported Singaporeans in our early years through programmes such as the Colombo Plan scholarships, we, too, hope to play our part as a responsible stakeholder and a trusted steward, in and outside of Singapore.

    Thus, 10 years ago, we committed to set aside a portion of our returns above our risk adjusted hurdle.  This was to be used to uplift the community at large, particularly in a developing Asia.

    To date, we have established and sponsored 16 community endowments, each with specific mandates to build people, to build capabilities, to build bridges between communities and to rebuild lives.

    These endowments are driven by separate, independent and passionate, thoughtful teams.

    From funding less glamorous research into mental health or Parkinson’s disease, to developing pilot programmes to support ageing-in-place; from lending a helping hand to caregivers, single parents and traumatised children, to programmes for disaster recovery and rebuilding lives; from bringing together youth across a diverse Asia to learn and grow together, to programmes on governance and town planning for civil servants from around Asia – these are but a small sliver of what the various endowment staff have done, to touch the lives over 170,000 people across Asia over the last decade.


    Friends, Ladies and Gentlemen:

    Singapore will be celebrating its 50th year of independence next year.  It has been a journey which has made a difference to the lives of our people.  In less than five decades, per capita GDP has grown over 100 times in US$ terms[14].  Life expectancy went from less than 65 years in 1965 to over 82 years[15] last year.

    As you can see, we may have owed our success to that fateful decision to withdraw British forces from Singapore by 1971 – that decision forced us to innovate and industrialise at great pace.

    Temasek, at forty this year, is part of the Singapore story.  Our journey has just begun.  We will, yet again, embark on a new journey of change and challenge, but also of hope and opportunities.

    As we face the uncertain world of change, and the exciting challenge of the Digital Age, I do hope that Singapore and Temasek will have the honour and privilege to work with many of you here, to make a difference – to bring about a better and kinder world, a more sustainable and thoughtful world, and above all, a more peaceful, compassionate and inclusive world.

    Thank you.


    1 Banqueting House, opened in 1622, was the location of the execution of King Charles I in January 1649

    2 Based on the description contained in Ptolemy‘s book, Geographia, written c. 150AD.

    3 A transliteration of Pulau Ujong, Malay for “Island at the End”

    4 London is 1,582 sq km, vs Singapore at 718 sq km

    5 In 1819, Sir Stamford Raffles signed an agreement with Hussein Shah of Johor, recognising him as the rightful ruler of Johor, and in turn, providing for exclusive British protection of Singapore.

    6 This was in exchange for the British leaving Bencoolen, and other properties in Sumatra and the Riau islands.  Bencoolen is present day Bengkulu City, capital of Bengkulu Province, approx. 21,000 sq km in size and about 600 km south of Singapore.

    7 Led by Chief Minister Lim Yew Hock, who had been associated with the sale of Christmas Island to Australia in 1957, and also negotiated for full internal self-government for Singapore during his term.

    8 Singapore’s GDP in 1959 was S$1.968 billion (£230m or US$516m, based on exchange rates at the time)

    9 Per capital income of S$1,580 was equal to £184 or US$516, based on exchange rates at the time.

    10 Temasek is an old name for Singapore, dating from before the 15th century.  It’s an old Javanese word, taken to mean sea town or land surrounded by water.

    11 Salary reductions varied according to rank, with support staff taking a 1% salary reduction.

    12 Also known as the Deepwater Horizon oil spill or the Macondo blowout.

    13 Stuart Gulliver, Group Chief Executive Office of HSBC Limited, gave the introduction to Ho Ching

    14 Per capita GDP of US$516 in 1965 to US$55,183 in 2013.

    15 Average life expectancy at birth of 82.5 years: males at 80.2 years and females at 84.6 years.

    David Cowell is a freelance journalist working for Asia House.

    Ho Ching also spoke about how North America and Europe were markets of increasing interest to Temasek in a separate rare interview with Asia House. To read the interview in which she spoke about Temasek’s future goals and aspirations click here.

    To find out more about the Asia House Asian Business Leaders Award and who the previous recipients were click here.