Don’t be reserved about Singapore’s reserves

SEPTEMBER 6 — Singapore’s 14th Parliament kicked off its term last week with the President’s address. 

The address and the debate that follows typically provide an indication of the government’s policy priorities and direction for the next parliamentary term.  

This year, unsurprisingly, Covid-19 and its economic repercussions were at the top of the priority list. 

We also saw Pritam Singh as Singapore’s first official Leader of the Opposition given the chance to question government policy and his remarks and the government’s responses provided the first real debate of the new parliament.   

Pritam responded to various statements made by Prime Minister Lee Hsien Loong but the part that really caught my attention was the debate regarding Singapore’s financial reserves. 

Prime Minister Lee cautioned the Opposition against formulating policies that relied on tapping reserves for spending. He compared the Opposition to inheritors looking to spend inherited money.  

To this, Pritam said the Opposition was not interested in drawing down the reserves but was interested in more transparency and perhaps spending a greater proportion of the interest and capital earned from the reserves.   

Now at the heart of this debate is the fact that Singapore does not officially disclose the full extent of its reserves.     

Singapore’s reserves are held via the Monetary Authority of Singapore (MAS) — effectively our central bank and by two sovereign wealth funds, Temasek and GIC which are private companies owned by the Ministry of Finance charged with managing state funds.  

The money in MAS, Temasek and GIC belongs to the Singapore government and therefore to the citizens of Singapore but the exact extent of the holdings is not disclosed to the public. 

I’ve seen estimates from 800 billion to well over a trillion USD but the reality is no one outside key government figures knows for sure.  

Now the government has long argued that the extent of the reserves is a state secret and that this information can’t be made public in order to protect the nation from financial attacks and speculative moves against our currency. 

I understand Singapore as a small strategically positioned nation has unique attributes — but why shouldn’t we be open about our reserves?  

Hong Kong has remained transparent even though it has in fact suffered attacks against its currency. Norway, a small (in terms of population) nation with enormous reserves, is also very transparent as is just about every other major economy, so why aren’t we?  

Frankly, Pritam — instead of talking about plans to spend just the interest or growth of reserves — should focus on getting access to the full financial picture before making any suggestions.  

And if the amount held really can’t be divulged to the public surely it can be discussed with the Leader of the Opposition. 

The point of an opposition is to formulate alternatives to government policy and I don’t see how they can do that effectively if they don’t know what resources are available.  

While the prime minister is right in saying our hard-earned reserves should only be drawn down in cases of extreme emergency, Covid-19 and its economic fallout seems to constitute a real emergency. 

In this sort of situation it makes sense that the Opposition and ideally the general public have a clear idea of the resources at our disposal.   

There are times when I sympathise with the government especially when strategic necessities prevent them from making what would be the popular choice but this decision doesn’t make sense to me.  

In times of national emergency, the people naturally want information. 

They want to know what sort of financial footing the nation is on and if this information is not forthcoming, misinformation, rumours and speculation are bound to fill the gap and these can be, if not more, dangerous than speculative attacks.  

*This is the personal opinion of the columnist.