Lee Hsien Loong (Singapore Prime Minister) – GIC 40th Anniversary Dinner (Nov 2021)

Chapters

Abstract

GIC at 40: Charting Singapore’s Sovereign Wealth Fund Through Turbulence and Triumph

Celebrating its 40th anniversary, Singapore’s Government Investment Corporation (GIC) stands as a testament to the foresight and strategic planning of its founders. Created in 1981, GIC emerged as a sovereign wealth fund aimed at safeguarding and growing Singapore’s financial reserves. Over the decades, it has played a pivotal role in steering the nation through economic upheavals such as the 1997 Asian financial crisis, the 2008 global financial downturn, and the recent COVID-19 pandemic. GIC’s remarkable journey is underpinned by a commitment to meritocracy, adaptability, and rigorous risk management, all of which have enabled it to deliver consistent, long-term returns, significantly enhancing Singapore’s international purchasing power.

GIC’s Genesis and Mission:

GIC’s inception was driven by Dr. Goh Keng Swee’s vision to manage Singapore’s reserves effectively, free from political interference. Its core mission, to generate long-term real returns, has remained unchanged, setting the tone for its operations and strategies.

Achievements Over 40 Years:

As a globally respected sovereign wealth fund, GIC’s achievements are significant. Operating in 40 countries with a diverse portfolio, GIC has maintained an average return of over 5% above global inflation, a testament to its investment acumen.

Critical Role During Financial Crises:

GIC proved its mettle during multiple financial crises. During the Asian financial crisis, its robust reserves fortified the Singapore dollar, allowing the implementation of essential banking reforms. In 2008, GIC’s backing was crucial in stabilizing Singapore’s banking system with a S$150 billion guarantee. Amid the COVID-19 pandemic, GIC’s reserves were instrumental in funding fiscal packages to support the economy.

Success Factors:

GIC’s success can be attributed to its emphasis on meritocracy and professionalism, adaptability to changing market dynamics, a cautious investment approach balancing risk and return, and adherence to core values of prudence, respect, integrity, merit, and excellence.

Influence of Political and Fiscal Conditions:

Singapore’s political stability and prudent fiscal stance have provided GIC the freedom and foundation to focus on long-term investment goals without the pressure of frequent withdrawals.

Navigating Future Challenges:

Looking ahead, GIC faces a complex global landscape marked by economic uncertainties, low interest rates, inflation, and geopolitical tensions, particularly US-China relations. It must also address climate change challenges, seeking investment opportunities in green technologies.

GIC’s Sustainability Framework:

GIC has developed a sustainability framework, recognizing the importance of addressing environmental and climate-related risks in its investment portfolio.

Domestic Challenges:

With increasing social and healthcare spending in Singapore, GIC faces the challenge of balancing the need for tapping reserves against the alternative of raising taxes.

Stewardship and Intergenerational Equity:

GIC’s approach reflects a stewardship mindset, emphasizing the need to balance present-day needs with sustainable use of resources for future generations.

Preserving Success Formula:

GIC’s resilience and prosperity rely on maintaining its successful investment formula, which combines boldness with innovation in talent and organizational strategies.

Core Purpose and Values:

As GIC adapts to evolving circumstances, staying true to its core purpose and values is crucial for its continued success.

Confidence in Future Success:

Reflecting on GIC’s journey, there is a strong confidence in its ability to meet future challenges and continue delivering on its foundational mission.



Marking its 40th anniversary, GIC stands as a beacon of Singapore’s strategic foresight and resilience. Its ability to navigate a rapidly changing global financial landscape, while maintaining a steadfast commitment to its core principles, sets a benchmark for sovereign wealth funds worldwide. As it looks to the future, GIC’s ongoing innovation, adaptability, and adherence to its foundational values will be critical in sustaining its success in an increasingly uncertain global environment.

Supplemental Information:

– GIC’s emphasis on meritocracy and professionalism has fostered a strong culture of excellence, attracting top talent from around the world.

– GIC’s adaptability is evident in its ability to venture into new markets, asset classes, and investment strategies, staying ahead of the curve and diversifying its portfolio.

– GIC’s cautious investment approach involves rigorous risk management and optimization of risk-adjusted returns, ensuring the long-term sustainability of its portfolio.

– Singapore’s political stability and prudent fiscal stance have provided GIC with a stable and predictable operating environment, allowing it to focus on its long-term investment goals.

– GIC’s sustainability framework includes monitoring climate issues and seeking investment opportunities in green technologies, acknowledging the importance of environmental and climate-related risks.

Notes by: ChannelCapacity999