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Anger, disbelief, fear, shock and tears. Those were just some of the reactions to the University of New South Wales (UNSW) Asia's announcement that it was giving up after just one term.
Even as UNSW, the Economic Development Board (EDB), the Ministry of Education (MOE) and other educational institutions (including the three local universities) continue to try to help UNSW students deal with the aftermath, there are other issues that merit debate on a more macro level.
The first concerns the accountability of government agencies.
The MOE had reportedly played an important role in attracting UNSW to Singapore in the first place. Furthermore, all private schools must register with the MOE.
Yet, when students and parents wanted to meet with the latter after UNSW's decision, the MOE's response was that UNSW had ultimate responsibility.
As for the EDB, it had sealed the deal with UNSW and had invested heavily in the project. Yet, it has declined to reveal the losses resulting from UNSW's pullout.
While disclosing the figures could affect the EDB's bargaining position in future negotiations with other universities, the fact remains that this is taxpayers' money. The Financial Times has reported the amount to be as high as $80 million.
The EDB has also not provided information on how the deal was structured. What sort of guarantees and commitments were extracted from UNSW? How could UNSW simply quit after just one term, when construction work on the new campus was already underway, apparently without having to pay compensation?
Did we give away too much to lure UNSW here?
The onus is on the EDB to explain what had happened and give an indication of our losses, while not compromising its ability to negotiate future deals.
Its continued silence does not sit well with Singaporeans, particularly in light of the Public Accounts Committee's recent findings of significant lapses in the EDB's internal controls and governance.
Singaporeans expect greater accountability from ministers and civil servants, given the recent public service pay hike. The handling of this case may not have met the enhanced standards expected by the public.
A more fundamental question concerns the Singapore model, which relies heavily on foreign investments to drive the economy. UNSW's departure demonstrates the risks inherent in playing this game, especially in an increasingly globalised world where competitors are everywhere and funds come and go easily.
Investors are understandably fickle, coming to seek returns and leaving if there are none. As with UNSW and other multinational corporations, when they pull out, Singaporeans have to pick up the pieces, whether they be lost jobs, missed opportunities or dashed dreams.
This could come without warning, such as when there is a management change and hardnosed businessmen such as UNSW vice-chancellor Professor Fred Hilmer disagree with the previous decisions made.
So long as we persist with this economic model, the risk will remain. I am not saying we should abandon this model — it has served us well in the past, and it could continue to work for the future.
But we have to be aware of the inherent risks, make sure our eyes are open to what could happen if things go wrong, and do our best to mitigate the risks.
Just as foreign investments have a multiplier effect on the economy, the negative repercussions of capital outflows will similarly be amplified.
And that brings us back to the EDB's role in attracting investments. Yes, capital should be able to flow in and out of Singapore freely, and we cannot stop an investor from leaving.
But surely it is not too much to ask that where public funds are spent to entice foreign investments, we also extract some assurances and commitments to stay in Singapore. This not only minimises the wastage of taxpayers' money, but also mitigates the risk of lives being disrupted by premature departures.
Ultimately, our model of foreign investments requires us to keep foreign investors happy, to ensure that the business case presented is realistic and justifiable, and to ensure a long-term binding commitment.
But, at the same time, we must not lose sight of the need to grow indigenous players who can compete internationally while retaining local roots.
Otherwise, we will always remain hostage to the whims of foreign investors.
The writer is a Nominated Member of Parliament and a corporate counsel, commenting in his personal capacity.
- TODAY/so
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