Parliament: PAP MP rebuts WP member's 'crony capitalism' charge

PAP MP for Jurong GRC David Ong.
PAP MP for Jurong GRC David Ong.

A Workers' Party (WP) member's charge of crony capitalism in Singapore was rebutted by PAP MP for Jurong GRC David Ong yesterday. He cited international indices that have consistently ranked Singapore as among the least corrupt countries in the world to make the point that "there is no room for crony practices in Singapore".

On Tuesday, WP Non-Constituency MP Gerald Giam had said that Singapore came in fifth among 23 countries on an index measuring crony capitalism by The Economist magazine.

Singapore should be on guard against "rent-seeking" behaviour here, meaning businesses or individuals "trying to make more money without producing more for customers", Mr Giam had warned. Some examples of rent-seeking include forming cartels, or lobbying for changes in regulations that benefit a company at the expense of customers.

Yesterday, Mr Ong said he fully agreed with Mr Giam that the Government should be on guard against rent-seeking, especially in major industries. "That is why the Government introduced the Competition Act in 2004 and established the Competition Commission of Singapore to protect consumers and businesses from anti-competitive practices of private entities," he said.

But Mr Giam was wrong to allude to the existence of crony capitalism in Singapore based on The Economist index which is "too simplistic", Mr Ong said.

"It looks at the wealth of billionaires in sectors such as finance, oil and real estate, which The Economist claims to be prone to cronyism in many countries. It does not examine or identify actual cronyism or rent-seeking behaviour in each country.

"Just because there are billionaires in these sectors does not mean that they must make their money through cronyism. Nor can we charge a sector in Singapore as being prone to graft and rent-seeking just because it is so in other countries," Mr Ong added.

He also noted that The Economist article had also pointed out that some countries have competitive markets in the sectors it labelled as crony sectors.

Observing that Singapore's intolerance of graft is well known internationally, he cited Transparency International's ranking of Singapore as the fifth least corrupt country in world.

He also noted that Mr Giam had neglected to say that the same Economist article placed Singapore first in terms of institutional quality.

Singapore applies its laws against corruption consistently, and makes no exceptions for anyone. It upholds meritocratic principles, where rewards are tied to one's efforts and performance. And it has created a conducive business environment that enables companies to compete on equal terms, Mr Ong said.

"I would like to assure Mr Giam that there is no room for crony practices in Singapore. If he has evidence of such practices, he should share it, instead of relying on indices which present an incomplete picture of the situation in Singapore," Mr Ong said.

In an e-mail response to The Straits Times, Mr Giam said his remarks were intended to underscore a message of "incentivising hard work and productive contributions to our economy and society".

The Economist's index should not be "casually dismissed", Mr Giam said, adding "there may be valuable learning points from all these indices, especially when we are ranked poorly".

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