INTRACO: Blazing a Trail Overseas for Singapore? by Faizal bin Yahya (review)

This pioneering assessment of the failure of a leading Singaporean government-linked company (GLC) is a noteworthy achievement, as books assessing the fall of major state-owned enterprises in Southeast Asia are rare. This volume is also an interesting read because it addresses a compelling question: how could Singapore’s first and principal trading company, INTRACO, fail in a country that adopted export-oriented industrialization to drive economic growth?

By providing an historical assessment of INTRACO’s rise and fall, the author offers numerous crucial insights into how the ruling People’s Action Party (PAP) cultivated and promoted GLCs. One core issue examined is that of the ownership and control of GLCs. While there were evident layers of interlocking ownership and control involving INTRACO, it was also tied to another GLC, the Development Bank of Singapore (DBS). Noting this tie, the book draws attention to the link that Singapore’s government created between a financial concern and a trading enterprise as a means to nurture a major transnational company involved in the trading of key commodities. While DBS had a say in the appointment of INTRACO’s senior management, the PAP evidently also had significant decision-making powers when such appointments were made.

The book’s reading of INTRACO’s growth reveals how the PAP adopted different models of development as the economy evolved. The government first operated as a strongly interventionist state, employing what has been classified as the developmental state model, before becoming increasingly neoliberal in orientation through the promotion of policies such as privatization. One crucial transition involved the development of an economy driven by GLCs into one in which small and medium-scale enterprises (SMEs) were actively nurtured and supported to drive economic growth. The government compelled GLCs to venture abroad, as this would help diminish the idea that these enterprises were “crowding out” SMEs at home. Privatization would emerge as a mechanism to help develop SMEs, even though this policy hindered the development of GLCs, which were by the early 1990s still leading corporate players in this economy.

This study offers other important contributions. For example, we learn how the PAP, specifically its founder Lee Kuan Yew, viewed Singapore’s entrepreneurs and entrepreneurial capacity. When Lee, as prime minister, began his country’s industrialization process, he did not actively involve Singapore’s leading private enterprises because he saw their owners as mere traders, with few or no skills to foster technological upgrading. Neither did Lee believe that Singapore had sufficient people with entrepreneurial skills who could be nurtured to drive industrialization, given the country’s small population size. Interestingly, when INTRACO, led by senior bureaucrats, initially failed to take off, Lee turned to the prominent Indonesian-born businessman-cum-trader Goh Tjoei Kok to help this GLC establish itself as a regional trading enterprise. Goh would be scathing in his criticism of bureaucrats who were trying to function as entrepreneurs, referring to INTRACO’s management as people who were “earning expatriate salary and doing small Chinese business” (p. 50).

INTRACO’s ultimate failure can be attributed to one leading issue: it had to fulfil contradictory goals — that is register high profits while performing “national service”. When undertaking national service, the pursuit of high profits was inevitably undermined. One national service that INTRACO undertook entailed breaking-up rice trading cartels and stockpiling the commodity. This was to guarantee that Singapore had a sufficient supply of rice as well as to ensure that the price of the product was not unduly raised by unscrupulous traders. After cornering the rice trading market, INTRACO would be subjected to serious criticism that it had undermined the development of domestic private enterprises. Another national service provided by GLCs entailed responding to foreign policies and the government’s endeavour to create a transnational investment regime. For example, when Singapore established cordial ties with China, GLCs were required to invest in the mainland’s economy. The venture of GLCs into China would...