Singapore’s new president Dr Tony Tan’s remark in Channel NewsAsia recently, that the custodial responsibilities of the president are an extremely important part of Singapore’s economic governance, especially over the use of the country’s financial reserves, this I agree with.
In this regard, President Nathan revealed recently that the past reserves have been used more than 27 times since 2002, for projects like land reclamation and the Selective En-bloc Redevelopment Scheme (Sers).
Govt use past, not current Reserves?
The reason given for approving the use of the past reserves was that although prior to 1999, such projects were funded out of current reserves, even though the government of the day would usually not benefit from them, such infrastructure projects often span across terms of government, which may disincentivise the government of the day to undertake them using current reserves, even though they benefited Singapore in the long term.
This revelation on the use of ‘past reserves’ just before the coming presidential elections, underscores what President Dr Tony Tan has been emphasising all along as arguably the focal point of his campaign – that the President holds the ‘key’ to the past reserves and therefore needs the experience, knowledge and expertise to make the right decisions in the future.
The above reason given may be somewhat of a contradiction, as the President should guard against a government of the day, from wanting to use past reserves instead of current reserves, due to being “disincentivised” from doing what’s populist with short-term gains rather than long-term projects which are good for the country.
President didn’t guard Reserves?
After all, wasn’t it precisely to prevent a government from using the past reserves other than when absolutely necessary, that the office of the presidency was created in the first place?
MOF clarification opens up more questions?
Since the Ministry of Finance (MOF) has clarified that The Net Investment Returns Contribution (NRIC) of about $7 billion is drawn from returns on assets in excess of the liabilities and not gross assets, Yahoo News, why was the past reserves allowed to be used when the average annual NRIC was $7 billion?
Surely the more than 27 times that the past reserves have been used since 2000, possibly be more than $7 billion a year?