Kirkpatrick: Managing State assets to achieve developmental goals – The case of Singapore and other countries in the region


This paper is set in the context of the OECD’s Working Party on State-Ownership and Privatization Practices intermediate output on ” SOEs and inclusive growth”. The issues covered in different countries include: what role has been assigned to SOEs and other state controlled entities as agents of development strategies and industrial policy; how has this been implemented through corporate action and ; how have such practices been implemented in different countries. The final report covering a number of countries will be published by the OECD as part of a publication aimed at identifying national practices toward using state controlled corporate entities to support developmental priorities. The final report aims to draw relatively concrete conclusions regarding what seems to have worked, what did not, and pitfalls to avoid.

While the concept of development goals being achieved through different combinations of policy actions, including state owned assets, is conceptually sound, it is still difficult to apply in practical work. Developmental goals might actually mean very little, and just form the basis of political rhetoric and public relations material. As a result, both political scientists and economists often use revealed preferences: what those in power actually do rather than what they say. This involves intensive analytical work and a great deal of ” fact finding”.

Development will involve the development and interaction of many different institutions, that will be both complementary and substitutes for each other. The developmental question is achieving the right balance for the country in question. Corporate actions by state controlled bodies are an important aspect but they can be used for much more limited political and economic goals, although their macroeconomic impact may be much wider.

This paper therefore focuses on one city state, Singapore, to make the task manageable. Being a city state, one does not have to deal with agricultural policy which often forms a crucial part of the development problematique. Analysis of other countries in the SE Asia region is thus more discursive in nature.

Part I discuses Singapore since independence in 1963. It outlines the economic history and, more importantly, the political economy of the country, especially its concept of social equity. State assets have played a crucial role, especially since 1974 through its holding company Temasek, which has attracted attention in a number of countries. How it works and how it has evolved are discussed. However, the discussion needs to be set in the wider policy framework, especially monetary and financial policy.

Part II briefly discusses each SE Asian nation, how its development strategy has changed over time, how policy instruments have interacted, and how this has impacted on the use of state owned assets. For the purpose of this paper, SE Asia includes: Indonesia, Malaysia, Singapore, the Philippines and Thailand. However, some reference is made to Vietnam and its recent policies.


Available for download here.