Five months ago, it was reported that GIC paid US$1billion for 15% of Brazil’s Rede D’or.
Rede D’or ranks among Brazil’s biggest hospital operators with 4500 beds across more than 27 locations. Although Brazil’s healthcare sector is profitable, it is “grappling with an ageing infrastructure, a dearth of qualified staff and rising costs”.
PAP seems to have got its priorities all wrong – it has prioritised foreigners over citizens. Why does it not invest in citizens’ well being and force hospital patients into tent/corridor wards? Why do hospital appointments stretch for months, some more than a year?
Why are we not investing in our local doctors but import many foreigners who don’t seem to be qualified?
Singaporeans would understand if PAP did not have the funds to finance healthcare infrastructure but it did. The problem is billions are invested overseas because Singaporeans’ well being does not provide any financial returns to PAP.
But our Brazilian investments do not guarantee any returns because they are extremely risky as is evident by the exchange rate volatility.
Since May when the investment was first announced, the Brazilian real has already depreciated by 17%.
Over a 10-year period, the Brazilian real has halved in value. This would mean the returns (dividends, if any) if converted into local currency has been steadily declining in value or any capital gain must exceed 100 % just to break even.
By assuming huge risks in its investments, it appears GIC has not hedged its currencies. GIC is simply taking a huge bet that there’ll be capital gains because its investments do not provide a sufficient steady stream of dividend income to pay CPF members. GIC could clarify if this is not factual.
Since 1994, the Brazilian real has lost about 900%.
Should GIC make billion-dollar bets, instead of smaller ones, knowing full well the impossibility of exiting such investments when they sour?
Before PAP invests in foreigners’ healthcare infrastructures, it should ensure that thousands of Singaporeans are not warded in makeshift wards and hospital appointments do not stretch longer than a year.
Image source: SDP