The world is mourning the death of Lee Kuan Yew, the visionary yet controversial father of modern Singapore.
We at home should also get ready to mourn the imminent passing of the Industrial Bank of Venezuela. Those two deaths have more in common than you think.
The term “padre de la patria” is thrown around a lot, but few could lay claim to the title more than Lee. Steering Singapore through independence, he led it to become the modern world’s most succesful development story. He did so thanks to a combination of sophisticated, counter-intuitive policy moves, as well as the repression of his political opponents.
At the same time, our Industrial Bank (BIV), the long-in-the-tooth State-owned financial institution, is practically bankrupt. The tale is the usual one: no accountability, cushy loans to cronies, no strategic vision whatsoever, and years (decades even) of mounting losses.
The funny thing is that it didn’t have to be this way.
Lee would have been the first to argue that in order to enact a succesful development policy, the State needs to have a bank, or at least some leverage with which to guide loans into “strategic” sectors. Singapore’s state-owned DBS Bank is the largest bank in Southeast Asia, enjoying enviable credit ratings and a rock-solid reputation. Thanks to a combination of honesty, clear-headed strategic planning, and a commitment to benchmarks for success, Lee’s Singapore is the poster child for industrial policy gone right.
Our BIV? Not so much.
When was the last time you heard the BIV run a profit? When was the last time you learned that a BIV loan ended up benefitting a local industry? Year after year, taxpayers have bailed out the BIV and most of the state’s financial institutions with little to show for it.
It’s a shame the BIV will have to die this way. But after its demise, we can probably sit back and think about what a sensible development bank should look like. Maybe we can star again from scratch, and learn a lesson or two from Lee Kuan Yew.
17 thoughts on “Lee and the BIV: Two deaths”
Singapore is smaller than Margarita island and has no natural resources. It sort of boggles the mind in a comparison of this sort.
In a way, what’s remarkable is that they FINALLY managed to pull the plug! I wish
I knew the full story.
It can’t be just because it was a money pit. Keeping loss-making public sector white elephants in operation is what chavismo is all about.
If they start liquidating state owned enterprises just because they’re loss making, we’re going to end up with a grand total of one SOE pretty quickly…
Yeah, it’s interesting, but the way the press is reporting this, it’s as if that dog is about to croak. Ver para creer.
Lack of profitability cannot be the issue.
There have to be ulterior motives : using the liquidation to cover embarrassing traces (a liquidation is a great opportunity to “lose” records), or making room for some more pliable institution, or someone found something at BIV not quite as nailed on the floor as it should and wants it for himself, or … or God knows what.
But proper accounting and sound standards of operation are certainly not part of that decision.
BIV was a political piggy bank for most of its life, awarding loans to politicians/military/cronies, very few, if any, ever being utilized for productive purposes, or paid back. But, fear not, the money will continue flowing/being lost, through such Rojo-Rojito creations as El Banco De La Mujer, El Banco Del FANB (Fuerzas Armadas Bolivarianas), and other similar new bank creations for rewarding the faithful/scamming public funds.
Oh Yes, banking system “Hecho en Chavismo”….
The BIV is considerably older than our current glorious revolutionary nutjobs. It has been a basket case for as long as I can remember (say the 1980s) . Having said that, it’s a telling sign on how bad things have gotten under the “revolution”.
I went to Singapore on business, arriving from Bangkok, Thailand, where I had been living for a couple of years. I remember being pleasantly surprised to find that there was no queue for Immigration. I commented on it to the Immigration Officer, a pleasant older lady. She asked me why I was surprised and I explained that in Thailand, where I had come from, it was normal to wait in line at least 45 minutes to pass Immigration. She laughed in that curiously reserved manner of the Chinese and said, “Oh, Singapore would never permit that.”
I stayed ended up staying in Singapore for eight months. It was clean, safe, inexpensive, and it all worked.
RIP, Lee Kwan Yew. If any country had to have a dictator, they would be lucky to have you.
When I was in Caracas, I really enjoyed the “Hecho en Socialismo”… The signs got larger, the output got smaller…
LOL Kevin. So true. The Hecho en Socialismo is all over the place and is the biggest advertisement against socialism in the world.
The safest I have ever felt exploring a new city was Singapore…. The least safe, Chicago. (Note: I knew better than to go exploring in Caracas, my host wouldn’t let me head out alone….)
I can´t see the relationship between the death of an Asian head of state and the supposed bankruptcy of a small public bank in South America.
And BIV will not go bankrupt, the government will keep it working.
The BIV is not only broke , its a child of the Cuarta , bad pedigree , After Chavez took power quite a few ‘Socialist’ state banks have been created and since they are all going broke and the money is tight BIV is the state bank which can be considered most expendable. Believe there are other state banks which have dissapeared these last few years through ‘consolidation’ . !!
Lee Kuan Yew , was a genius and a giant , he made modern Singapore not by creating a new model of governance but by resurrecting a very old one , the traditional Chinese Mandarin Model which is elitist , meritocratic and paternalistic . He adapted it to modern times and made it work . Deng Tsiao Ping saw how succesful it was and used it as a model for the building of a new China . Modern China owes a huge debt to Lee Kuan Yew.
LKY was chinese but the singapore of his youth was made up of three different people , each living in their own enclave , Chinese, Malayan and Indian . He insisted that these enclaves would dissapear and be replaced by a society where the three people formed a single community . He understood that union was the first step towards an ordered society .
The US constitution has the consolidation of Union as the first goal of government , problem with traditional democracies however is that it is based on an adversarial system where people have great fun in scenifying grand epic ideological confrontations , so that even if they can rationally work together , they must be confrontational in order to gain the upper hand and gratify the taste for competitive blood sports of its followers.
Eastern culture prizes harmony and adaptation , Western culture ( specially the anglo saxon version) prizes individuality , competition and the worship of the lone cowboy hero ) . Mandarin governance is thus more easily adopted by people from the far east than by western or wanna be western societies .
We have a lot to learn to Singapore , but for people in our culture it would be very hard going.!!
Singapore works a lot better basically because they cannot STEAL:
Criminal law of Singapore
From Wikipedia, the free encyclopedia
A variety of activities ranging from smoking to carrying durians is banned on Singapore’s Mass Rapid Transit system.
Although the legal system of Singapore is a common law system, the criminal law of Singapore is largely statutory in nature. The general principles of criminal law, as well as the elements and penalties of common criminal offences such as homicide, theft and cheating, are set out in the Penal Code. Other important offences are created by statutes such as the Arms Offences Act, Kidnapping Act, Misuse of Drugs Act and Vandalism Act.
In addition, there is a perception that Singapore society is highly regulated through the criminalization of many activities which are considered as fairly harmless in other countries. These include failing to flush toilets after use, littering, jaywalking, the possession of pornography, the sale of chewing gum, and sexual activity; such as oral and anal sex between men. It has been claimed that one of the results of such heavy regulation is that Singapore has one of the lowest incidences of violent crimes in the world. A catchphrase recently used in a police anti-crime campaign was “Low crime does not mean no crime”.
Singapore retains both corporal punishment (in the form of caning) and capital punishment (by hanging) as punishments for serious offences. For certain offences, the imposition of these penalties is mandatory. More than 400 people were executed in Singapore, mostly for drug trafficking, between 1991 and 2004. Statistically, Singapore has one of the highest execution rates in the world relative to its population, surpassing Saudi Arabia. Science fiction writer William Gibson famously described Singapore as “Disneyland with the death penalty”..”
This would fix the entire Venezuelan banking system, (and many other things) overnight.
I skipped the whole wall ‘o text there because I can offer you the magic formula that worked for Singapur and that would instantly fix this whole mess here in Venezuela:
ENFORCE THE LAW AND NOT ALLOW ANY IMPUNITY.
According to recent press releases it seems that the Government will pull the plug of the BIV, either by liquidating it or by merging it along with other State banks. There’s some peccadillo with the Bolivarian Union of the BIV that obviously doesn’t wish to see the bank underwater.
The World Bank Group consistently ranks Singapore as the #1 country for business-friendliness. The USA is usually around third or fourth but last year dropped to seventh (thanks, Obama). Oh, Yeah, Vze. is 180th.
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