CPF could be holding the watering can
By Mano Sabnani, Business and Financial Consultant
First published in TODAY
1-2 Mar 2003

Why not allow some of this money in Singaporeans' CPF ordinary accounts to be used for business? It could be a loan scheme and there could be terms and conditions, requiring the CPF member to repay the loan with accrued interest over a period of time. Such a scheme will allow Singaporeans to create self-employment and also nurture SMEs and entrepreneurship.

If they are lucky enough to remain employed until the age of 55, they could use surplus funds in their CPF accounts to invest in companies set up by unemployed friends and contacts.

As a nation, we have to rethink our mindsets about entrepreneurship. It is not just about the big guys or the brainy guys who want to embark on big, high-tech projects. The small guys with little money who venture into, say, Cambodia to emploit trading opportunities, or those who set up food stalls back home in Singapore, are also entrepreneurs. Any one of these people could grow to become big entrepreneurs, if they persevere.

And for that matter, Singapore needs also to broaden its definition of creativity and success. In the United States, for instance, the definitions are much broader. Academic success is recognised for what it is and winners of scholarships are not given undue weightage.

People who excel in sports and the arts carry good weight wherever they go. Entrepreneurship is respected and failure forgivens. Bill Gates, for example, dropped out of college to pursue entrepreneurial instincts. He created Microsoft and had several false starts before putting it on a strong growth path.

Locally, Sim Wong Hoo of Creative Technologies is often cited as a successful entrepreneur, but there are few other living examples of such global success. Some build companies and accumulate assets, but profitability is unclear. Other local companies are profitable but they remain small, as their businesses may not be scaleable. The GLCs or Government-linked companies are omnipresent, but cannot be really considered to be entrepreneurial successes, given their special situations.

Is the picture really that dismal, you might ask. Do Singaporeans intrinsically lack creativity and the will to take risks? The answer is an unequivocal "no".

Singapore, as a nation, grew on the back of immigrants rooted in entrepreneurship. For a hundred and forty years, it grew, like Hongkong, in a largely laissez faire or free enterprise mode. Trade grew on the back of a natural deepwater port and with them, many sizeable businesses centred around rubber, tin and property as well as banking. We had the likes of Lee Kong Chian, Tan Chin Tuan and P Govindasamy, all giants in their own business areas.

Government was relatively small in those days. It looked after education, health, defence and home affairs and left business to the private sector, with the exception of essential industries like power supply and the port/airport. Property values were realistic and business costs bearable, overall. There were not many jobs in the public sector, so entrepreneurship thrived.

However, it is not possible for the country to go back to the mode of the 1950s which featured high unemployment and poor housing as minuses. Singapore is now almost a developed country, with all that that means: a good standard of living, relatively high wages and lofty property prices and rentals.

Entrepreneurship can still thrive in such an environment, but the country needs to re-examine the size of its government and its presence in many fields, including business. In re-making the economy, more space needs to be given to private initiative and self-reliance encouraged.

The government is walking its talk, with Mr Lee's indication yesterday that more government companies will be divested, including the likes of industrial estate developer, Ascendas. But the fact remains that we are at least five years behind the US in reducing government involvement in various activities, and keeping the overall public sector size down.

The re-making of Singapore is all about making the economy more vibrant and allowing the people to be more self-reliant and entrepreneurial. There is awareness that an over-protected citizenry guided by a paternalistic government that feels uncomfortable leaving any activity totally to private initiative is hardly a way to ensure long term competitivenes and vibrancy as a nation.

Size of government has to be reduced to an optimal level, with the focus on Defence, Education, Health and Home Affairs, including management of the economy. But even in education and health, the private sector can play a bigger role, with government encouragement and support.