Neither Civil Nor Servant – the Philip Yeo Story

IMG_20180414_171306

Philip Yeo is a name I first encountered when he publicly shamed government scholars who broke their bonds and suggested that elected PAP MP Chng Hee Kok should resign because he defended these bond breakers by pointing out that a scholarship bond is merely a contractual agreement. I took further notice of Yeo when it was disclosed that he wrote in his book that men in Singapore were wimpy, whiny, and immature even though they have served their National Service.

So who is Philip Yeo? What made him dare to do or say all that? This book by Straits Times news editor Peh Shing Huei begins with a secretive meeting at a restaurant in Cambridge, Massachusetts. The EDB officers accompanying Philip Yeo were told to wait outside while he talked to Richard Li, son of property tycoon Li Ka Shing. Li had offered Yeo a S$9.3 M annual package to leave the civil service in Singapore and join Pacific Century. Why did Pacific Century come up with such a generous offer and why was the Singapore government so anxious about Yeo leaving the civil service?

A SJI boy, Philip Yeo snagged a Colombo Plan scholarship to study industrial engineering at the University of Toronto. Upon his return, he was dropped in various departments including the Ministry of Finance, SGH and finally ended up as branch head in the Logistics Division of Mindef in 1970. This was where Yeo would begin his colourful life in public service. Yeo was only 24 then, but he was energetic and impatient. Thanks to the chaotic situation in the early days of the SAF, Yeo’s actions, which tested the limits of legality, worked well. He first “abducted” well-educated but unfit soldiers from the battalions and made use of their education and knowledge to assist him in procuring and distributing equipment. Within a year, he was promoted to department head of the Organisation and Control Department.

Pencil portrait of Singapore Goh Keng Swee

Still, the SAF was not fully equipped. When Dr Goh Keng Swee was doing camp inspection, he would “borrow” items from other camps to make the one being inspected look good. The COs from the other camps protested and Yeo proudly admitted that he silenced them with threats and intimidation. He even obtained permission from Dr Goh to sign cheques and pay contractors so that construction work at the camps could proceed faster. Yeo went on a rampage. When he wanted an office, he would instruct men to throw out the tables of the officers occupying it. When he wanted space for his AMX-13 tanks, he would just occupy it without going through the proper procedures. At a time when only the Ministry of Finance was allowed to have mainframe computers, Yeo ordered an IBM 4341 for Mindef but declared it as “intermediate business machine”, removing all mention of computers. How did he manage to get away with all that?

“I learnt how to handle the old man [Dr Goh]. Get the job done. Don’t go into too much details and he would leave me alone.”

Yeo left for his sabbatical in Harvard in 1974. In 1975, the Vietnam War ended with the humiliating defeat of the US. The domino effect appeared imminent and leaders in Singapore were very worried. Dr Goh appointed him Director of Logistics Division when he returned in 1976. His immediate task was to upgrade the armament production capability and capacity of the Thai military.

DSC_51381

In 1980, not long after the Vietnamese invaded Cambodia and repelled the Chinese, the Thais asked for 10 million rounds for their M16s. Yeo fulfilled the order in 7 days. How was that possible? That’s because, back in 1967, Dr Goh introduced the concept of a civilian company manufacturing ammunition and run on commercial principles. Chartered Industries of Singapore CIS was born. Almost 100 other companies manufacturing various military hardware followed, supplying weapons not only to Mindef but other countries as well. They were eventually amalgamated to form the ST Group.

Why commercial firms run by civilians? After witnessing the military coups in Thailand and Indonesia, Dr Goh Keng Swee was worried that the same might happen in Singapore. He ruled that ammunition must not be in the possession of the military and full equipping can only be done with the approval of the Minister or Permanent Secretary. Yeo was promoted to second permanent secretary of Mindef and put in charge of four of the military hardware companies, effectively selling his own companies’ products to his own ministry. Yeo is unabashed about performing “reverse engineering” on foreign-made weapons and then copying them. He was sued once, but he asked the plaintiff rhetorically if they thought they could win a case against the Singapore government. The case was finally settled for USD1M.

On June 23 1980, Vietnamese forces based in Cambodia invaded Thailand but the Thais responded with tremendous firepower, destroying the Vietnamese attempt to realise the domino theory. Philip Yeo was naturally proud of his contribution to that victory, but on Page 74, he made the rather strange remark that “When I supplied ammunition to Mindef, it was through an open tender. My advantage was that I had no freight cost, so I could be 5-10% cheaper than my foreign competitors”.

Further down his career, Yeo started showing the “insubordination” for which he is so famous. Dr Goh instructed him to buy 2 Hawkeye planes from the US. Yeo came back with 4. One crashed when it reached Singapore. When asked if he was reprimanded, his “explanation” (if you can call it that) was “I had no personal gain or benefit. What’s there to scold?”

In 1985, Singapore was hit by its first deep recession since independence. Then PM Lee Kwan Yew wanted Philip Yeo to head the Economic Development Board (EDB). Dr Goh, who had retired by then, advised him to go to SIA instead. He followed his new boss. In 1986, he was seconded from Mindef to EDB which he found to be too complacent and bureaucratic. True to form, he immediately added 38 investment promotion officers and doubled the overseas offices from 18 to 37. While his engineering background came in handy in Mindef, economics was an entirely different thing. Yeo said that he just focused on creating jobs and not applying economic theories.

By 1988, the Singapore economy was well on its path to recovery. Singapore’s Fixed Asset Investments in manufacturing crossed the S$2B mark. But there was a problem. Wages here were rising “too fast”. Yeo decided to tackle the issue by finding a new location that allowed MNCs to split their operations, letting the high value work remain in Singapore and taking the labour intensive work abroad. Everyone thought he was crazy when he suggested Batam.

Yeo ignored the warnings and procedures, borrowed money from reluctant bankers under Singapore Technologies Industrial Corporation STIC and went ahead to build Batamindo Industrial Park in Batam with Salim Group holding 60% and STIC holding 40%. It was a runaway success. 84 international companies moved in, generating US$950M in 1996. Once an unknown island, Batam became a household name with entertainment spots and radio stations that gave those in Singapore a run for their money. Singaporeans found a new holiday destination. Unfortunately, politics in the post-Suharto era would create challenges for these companies in Batam.

1000 - Fast yang tidak terlalu fast

So Yeo didn’t stop there. Under advice from the retired Dr Goh, he built the Wuxi-Singapore Industrial Park on a pure commercial footing. Both Batam and Wuxi were successful and both took off without any direct supervision or investment by the Singapore government. Philip Yeo also spoke no Mandarin. But the Mandarin-promoting Singapore government soon conceptualised its very own, much bigger Suzhou Industrial Park SIP – under the direct supervision of then Senior Minister Lee Kwan Yew and accompanied by huge fanfare. When the project failed to take off and a competing Suzhou New District was built, it was time to push the panic button and call Philip Yeo – just as the retired Dr Goh Keng Swee had predicted! Reluctantly, Yeo got roped in, but it was too late. According to Yeo, the whole project started off on the wrong footing. First was the location (away from a new district that the Chinese were already planning to build) and next was letting the Chinese hold only 35% of the stake.

Yeo moved on to his next crazy project, perhaps the biggest in his career – Jurong Island. The project merged 7 islands into one with an area twice that of AMK HDB estate. Without waiting for funds and tenants to come in, Yeo had already begun to sell the island to companies that would form a petrochemical hub detached from the mainland. There were few takers at first, but Yeo went out on a limb to provide the investors with what they needed. After SM Lee Kuan Yew announced that the rupiah would crash when Habibie took over, Habibie was so furious that he called Singapore a “red dot”. There was no way they would sell natural gas to Jurong Island, but after Yeo approached Habibie directly (he had helped take care of Habibie’s mother when she was at Mt Elizabeth for medical treatment) Habibie announced that “He [Philip Yeo] is my younger brother. Whatever he wants, whatever he does, I support him.”

Jurong Island

The gas supply was settled, but PUB didn’t want to build the 480km pipeline from Indonesia. That did not stop Yeo. He created Sembcorp Gas to sign an agreement with the Minister of Mines and Energy – also his friend. No Singaporean leader was there to support him. Many had questioned the legality of Yeo’s actions, but he didn’t bother and the success of Jurong Island ensured that no action was taken against him.

The authorities zoned the Buona Vista area as a science hub in 2000. Yeo wasted no time to pick a plot of land off Portsdown Road to build his biomedical sciences empire. He called it Biopolis, dedicated to providing space for biomedical research and development activities and promoting peer review and collaboration among the private and public scientific community. He also created a controversial scholarship programme at A*STAR. Yeo said:

“… So if we discover a new drug in A*STAR, we will also own the intellectual properties and earn royalties. If we remain a pure production base, there is little we can do to prevent the pharmas from uprooting and moving to another country. … by going into research and having our our own scientists, Singapore can build a cluster that goes beyond manufacturing drugs.”

How innovative. Philip Yeo seemed a different man from the one “reverse engineering” weapons made by foreign designers and manufacturers. His ambitious target with the A*STAR programme, was to groom 1,000 Singaporean researchers (PhDs) in a decade (100 per year!). Minister Josephine Teo, of the space for sex fame, described it as a “battalion of scientists”. Yeo referred to foreign experts as “whales” who would groom our local “guppies”. Through the A*STAR programme (which invested nearly $1M per PhD scholar), Yeo had hoped to build a pool of local biomedical experts that will attract companies to set up their research centres here. Biopolis now houses A*STAR research institutes and research arms of pharmaceutical companies. Between 2011 and 2013, it boasted 292 patents per billion of spending on R&D. The author Peh went on to reveal a “great leap” in 2015 when Singapore’s homegrown MerLion Pharmaceuticals became the first in the country to have its new novel drug for ear infections approved by the FDA. Drug for ear infections? Understandably, not everyone was impressed. Dr Lee Wei Ling was just one of those who called it a mistake; not to mention a lot of other names she had for Philip Yeo.

Biopolis

In order to fund the unbelievably expensive A*STAR programme, Yeo dug into the research funds without consultation with his superior who was then Mr George Yeo, his junior in Mindef. Yeo had the audacity to say:

“… to beg is very humiliating. To borrow, you must return. Stealing is the best, as long as it is for the public good and not for personal gain. So I encourage my officers to steal.”

Interestingly, Yeo is of the opinion that the government had brought in too many foreign workers too fast. He feels that foreigners should add value and not displace Singaporeans. He also thinks that we should either import experienced experts or very young foreigners to be schooled and assimilated.

The title of the book offers a most appropriate description of Philip Yeo. Author Peh Shing Huei has been meticulous with his interviews and presented me with a very easy 6-hour read. Legendary for his insubordination, Yeo is no servant. Well known for breaking the rules and using plenty of Hokkien in his 10 interviews with the author, he was hardly civil. It was like having a Hokkien peng run Mindef in the 1970s and that was probably a good thing during those chaotic and wanting days. After Dr Goh retired, Yeo had the protection of Lee Kwan Yew. Lee once said:

“I know he’s sometimes insubordinate, but he’s got great strengths, and it would be a great loss to Singapore if we were to lose him.”

Philip Yeo left A*STAR in 2007. Lee Kwan Yew (then Minister Mentor) persuaded him to stay in the civil service, creating the post of Special Adviser on Economic Development for him. When MM Lee left the cabinet to become a backbencher in 2011, Yeo left the civil service for good and started his own private company, Economic Development Innovations Singapore in 2013.

As George Yeo wrote in the introduction, “great men have rough edges”, the normally rigid and draconian government has cut Philip Yeo an enormous amount of slack throughout his career. When the late Mr Lee said that Singapore needs mavericks, he was probably persuading MPs, ministers and others in the civil service who got pissed off to put up with Philip Yeo. Lee was probably not encouraging the less privileged entrepreneur in the private sector to do the same, especially the stealing part.

Interestingly, Yeo mentioned in the interview that a permanent secretary who is not “permanent” or a political leader who only completes two terms have no incentive to see long term projects through. It seems ironic that in spite of his disregard for authority and procedures, Yeo does not seem to be able to visualise the civil service as a politically neutral entity that should continue to serve the public regardless of the political party in power. That is perhaps also one of the main reasons for his continued survival. Had Richard Li not made an attempt to poach him, our ministers would probably not be paid as much as they are now.