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Crackdown on money laundering a testament to integrity of Singapore as a financial centre: DPM Heng

SINGAPORE – Singapore’s recent crackdown on money laundering in a case involving more than $1.8 billion in assets is a testament to the integrity of Singapore as a financial centre, said Deputy Prime Minister Heng Swee Keat.

Singapore’s ability to channel funds into productive purposes is critical to the success of the country as a financial centre.

Speaking at the 2023 Forbes Global CEO Conference in Singapore on Monday, Mr Heng said if funds are channelled into “unproductive or clever manufacturing”, the financial system would collapse. Hence, it is crucial to stay vigilant against money laundering and terror financing.

“We want Singapore to be a financial centre that people can trust,” he said, noting that many wealthy individuals are using Singapore as a base to do their philanthropic work and set up charities.

The probe came to light in August when the police arrested 10 foreigners – nine men and one woman, aged between 31 and 44 – following an islandwide raid. The suspects are believed to originate from China.

Mr Heng, who is also Coordinating Minister for Economic Policies, also touched on Mr Tharman Shanmugaratnam’s big win in Singapore’s recent presidential election where he scored 70.4 per cent of the vote.

He said the result is a “great sign” that the electorate is a discriminating one, and that it reflected citizens’ growing understanding of the role of the president, the importance of having a second key in safeguarding the country’s reserves, and in keeping Singapore corruption-free.

Rather than an endorsement of the ruling People’s Action Party, Mr Heng said citizens recognised that Mr Tharman, a former senior minister, had been a key member of the Cabinet, and were satisfied with how the party had helped the nation emerge stronger after the Covid-19 pandemic.

While he sees Mr Tharman’s win as a positive sign, Mr Heng said it might be too early to draw a conclusion that Singapore is ready for a non-Chinese prime minister.

“Will we ever have a non-Chinese as a prime minister? It will come one day because the Singapore society is maturing,” Mr Heng said, noting that the building of a multiracial society was former prime minister Lee Kuan Yew’s legacy.

The conference also featured dozens of global corporate leaders who discussed a wide range of issues, including how they were steering their organisations through changes in economic and political currents, as well as technological advancements, to survive and stay relevant in the future.

As Mr Rich Karlgaard, editor-at-large at Forbes, said in his opening address: “Let’s be clear. The old pre-2020 economy is not coming back. Watching and waiting for what’s next is not an option.”

A wrong turn could lead to economic stagnation, rising social instability, geopolitical turmoil and more energy and climate uncertainties, he added.

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Many panellists agreed that South-east Asia and India, with a combined population of two billion people, is the only region and country that would outgrow global growth between now and 2050.

Mr John Riady, executive chairman of Lippo Group, noted that Indonesia is entering an era of “endless” demand for affordable housing, fuelled by the rise in income and falling mortgage rates. Less than half of Indonesians own homes, he said, estimating a housing supply backlog of some 11 million homes in Indonesia.

Lippo Group is one of Indonesia’s biggest conglomerates with many diversified businesses, including property developer Lippo Karawaci and Siloam Hospitals, which has a chain of healthcare facilities in the South-east Asian country.

Africa is also seen as a potential powerhouse of the future. Over the weekend, the African Union was made a permanent member of the Group of 20 (G-20), a move which gave it the same status as the European Union.

Mr V. Shankar, chief executive and co-founder of investment manager Gateway Partners, said the world was becoming multipolar and more complex, with countries like India and the United Arab Emirates adopting a more “enlightened self interest” stance where alliances were concerned.

Dr Benedict Oramah, president and chairman of African Export-Import Bank, agreed. He said Africa cannot afford to choose sides: “We need to be everybody’s friend.”

Meanwhile, robust discussion revolved around China.

On concerns whether China was withdrawing itself from the Asia-Pacific Economic Cooperation (Apec), executive director of Apec Secretariat Rebecca Fatima Sta Maria said: “China has never disengaged.” 

On the contrary, China has been very active in trade, investments, smart cities and many other initiatives that are aligned with Apec’s interest, she added.

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Ms Jenny Johnson, president and CEO of asset manager Franklin Templeton, said the demise of China as an investment opportunity was overhyped. China is the world’s second-largest economy after the United States and opportunities can be found in its technology innovation, shifts to energy independence and food security. 

“When China gets it right, it is going to be a rubber band bounce up,” Ms Johnson said.

Mr Leo Liang Xinjun, co-founder of Chinese conglomerate Fosun Group, said investors should instead look at the opportunities the US-China decoupling has to offer.

He believes now is the time for China investors to take on risks.

Ms Stephanie Lo, executive director of Shui On Land in Hong Kong, feels China’s housing sector will emerge stronger after the current property slump, which had seen half of the developers missing their payments.

Until then, China faces a confidence crisis, with homebuyers afraid they may not get the homes they buy and youth unemployment at a record high.

On the global front, Dr Jeffrey Jaensubhakij, group chief investment officer of Singapore sovereign wealth fund GIC, warned of risks to the market’s expectations of a soft landing for the US economy.

He said the market has not seen the real impact of higher interest rates yet due to a lag effect. There is also a credit crunch in the US where, in the private credit space, one can lend money to senior secured borrowers for 9 to 11 per cent.

“That means that somebody is facing very tight liquidity conditions and very high interest payments,” Dr Jaensubhakij said, adding that he did not think central banks were ready to cut interest rates yet.

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