Singapore’s Government & Dollar Leverage
Singapore is an eclectic array of cultures, a dynamic business hub, a free port, and the least corrupt country in Asia (and maybe the world). Last week, I was having coffee with an entrepreneur at Fusionopolis, a government planned, built and supported massive 21st century tower that houses science and technology innovation. Part of our conversation went something like this:
Me: “I’m amazed by all that the government is doing here. How do they have so much money?”
Him: “Every government has money. It’s just that Singapore’s government isn’t corrupt. It actually uses it for it’s people.”
One of the most interesting pieces of information I learned is the way government officials are compensated. While Obama makes $400,000/year, the President of Singapore makes $3,355,270 in US dollars. The government benchmarks the salaries to slightly below the mean of public company CEOs, thinking that government should attract the best talent and such salaries prevent (or, more realistically, reduce) the need for corruption. When students from the best universities are polled in Singapore, their ideal jobs are either in the government or for a large MNC. Government jobs are seen as very prestigious.
On the entrepreneurial side, the Singapore government created the Technology Incubation Scheme through the National Research Foundation to jumpstart seed investments into startups. They will invest up to 85% of the total investment (up to a maximum of $500,000 Singaporean dollars). And, the NRF offers an option for its shares in the investee company to be bought out at a price of 1.1x the capital in the first 2 years or 1.15x the capital in the third year. It effectively means private investment leverage of greater than 4:1.
As I leave Singapore tonight, I marvel at what an efficient, highly skilled, and uncorrupt government has been able to achieve.