(The popularity of) Singapore’s foreign investments in Australia

26 Mar

In the last blog post, ‘The link between Optus and Israeli Corporations‘, I pointed out how a flyer was distributed in an anti- war rally encouraging people to boycott Optus due to its dubious connections between the Singapore government and the Israeli military.

If this campaign is to gain some traction, the investments in Australia owned by Temasek and GICs are likely to suffer with either Australians boycotting these companies or writing in to their political representatives or the media to protest against the connections.

After all, the amount of Temasek and GIC holdings in Australia is astronomical. It includes ABC learning, Temasek’s ‘first direct investment in Australia, for which it paid $401 million’; GIC RE (GIC’s real estate arm) which invested in ‘almost $3 billion building a portfolio of prime Australian assets located mostly in Sydney and Melbourne’ since 1996; Temasek’s CapitaLand, ‘which owns 55 per cent of the listed property company AustraLand’; Temasek’s subsidiary, CitySpring, which ‘bought underwater electricity cables BassLink for $1.2 billion’. Both GIC and GLC are estimated to own ‘more than $20 billion of holdings in Australia’.

With an impending economic recession in Australia, foreign government-owned investments (especially those from authoritarian regimes) in Australia will be viewed with greater cynicism. Recently, Greens leader, Bob Brown has moved a motion opposing the increase of Chinalco’s share in Rio Tinto, citing the reason that the Chinese government has powers to interfere with the appointment of Chinalco’s executive staff. His views were echoed by conservative National Party senator, Barnaby Joyce who argued that the ‘Chinese government [should not be able] to buy and control a key strategic asset in our country’.

These sentiments are mirrored by average Australians and can be gleaned from a 2008 Lowy Institute Survey in which 90% ‘strongly agreed or agreed’ that major Australian companies should be kept in majority Australian control. 85% of the respondents felt foreign government- controlled corporations need to be more tightly regulated than private ones.

70% of those surveyed opposed Singapore government foreign investments in Australian companies (with only 23% in favour). Singapore is only behind, Japan, UAE and China in this respect. Interestingly enough, the same survey noted that Australians respondents rated Singapore  at 65 (out of a scale of 0 to 100) when asked about their ‘warm feelings’ towards the country. It was rated below Great Britain, France and Fuji, but above Japan and US.

While it is too hasty to jump to any conclusions (with regards to recent developments and the survey), the negative ill- feelings that Singapore GLCs and GIC investments can arouse in Australia should not be simply dismissed. A prominent example was the political shit storm Temasek stirred up when it acquired Shin Corp, subsequently leading to the downfall of Thak Sin.

Similarly, an economic downturn, increasing suspicion over Singapore’s GIC and Temasek’s investments in Australian companies and the government’s close relations with Israel (with the latter being hounded over the illegality of its recent military operations in Gaza) may just be the catalyst for another political maelstorm.

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