Divesting State Owned Enterprises

Since its independence in 1965, state owned enterprises (SOEs) more commonly called government linked companies (GLCs) in Singapore have been used to develop the economy. The government had established GLCs to develop the Singapore economy because primarily there was a lack of entrepreneurial talent and lack of financial investment resources in the private sector to develop key economic sectors. One of the GLCs established was International Trading Company (Intraco). Intraco’s key role was to connect the economy with the international market especially the Socialist economies during the Cold War. Intraco was modeled after the General Trading Companies called Sogo Shosha (or Shoshas for short) in Japan. However, Intraco was never able to fulfill its potential and the government completely divested all its shares in Intraco in 2003. This paper examines the “failure” of Intraco to fulfill its potential to “blaze a trail” in the international economy. Why was Intraco unable to fulfill its potential?