By Jackson M. Henry —-

“As you rack our brains in finding solutions to the various problems in Palau, all roads leads to money”, said Liu Tai Wu, a prominent Hong Kong banker. Hence, generating more money to circulate in Palau’s economy is one of our government’s top priorities, as we continue to push forth our nation building efforts. One solution is the creation an investment and economic regulatory and advisory arm of the government whose goal is to develop the economy by empowering Palau’s private sector to grow.

The idea of a Palau National Economic Development Authority (NEDA) is overdue. NEDA can be an autonomous cabinet-level agency mandated to plan, monitor, coordinate and implement economic development programs for Palau. In developing nations, a NEDA serves as the engine for boosting the private sector growth in creating jobs and new tax revenues, while providing consultation, compiling statistical data and provide strategic planning for the nation’s policy makers. A nation without NEDA is tantamount to a ship without a rudder.

NEDA can also be that investment arm of the government in opening new industries that locals cannot enter due to either lack of money and shortage in managerial skills. NEDA can take risks in opening new industries, like aqua culture or large tourism development that are too risky or too capital intensive for local businesses.

The best example of how a NEDA pulled a country from its bootstrap to international prominence is Singapore. In 1975, under the leadership of Lee Kuan Yew, Singapore started its NEDA called Temasek Holdings.  PM Lee invested $100 million to capitalize Temasek as Singapore’s driving force to build an economy out of this once sleepy fishing village. Temasek invested in banking, real estate, communication, energy and transportation. Most of these companies were way too capital intensive for a regular “Average Joe” company to start.  Temasek was the “magic bullet” for Singapore’s nation building drive.

Today, Temasek owns parts of Singapore Airlines, SingTel, Bank of China, Singapore Power, and Virgin Atlantic, among others. From its original $100 million investment 35 years ago, Temasek’s assets have now reached over $159 billion, making it one of the most successful entity spreading wealth to the people of Singapore and helped propel Singapore to the top as one of the wealthiest city state in Asia. Moreover, it is assigned by Standard & Poor an “AAA” credit rating which is classified as “the best companies” in business.

If Singapore has succeeded with their NEDA, than surely, Palau can emulate Singapore’s success. Some pundits say that foreign aid has made Palau too comfortable to take risks or take new initiatives. Some say Palau just does not have the political will power to try new ideas. Others say, “all new ideas in Palau are like nails. The opposition hammers them back down”.


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