Singapore was the eighth most indebted country in the world.
Based on an article published in Fortune Magazine’s on 15th August 2011, Singapore was the eighth most indebted country in the world.
Fortune said that Singapore had debts of US$254 billion (S$307 billion), equivalent to 95% of its gross domestic product (GDP).
MOF (Ministry of Finance) has clarified that the Fortune Magazine’s article is misleading as it only looks at Singapore’s liabilities and not its assets.
MOF maintains that Singapore’s financial reserves are well in excess of its debt and that Singapore is a debt creditor and not a debtor.
Part of Singapore’s reserves, which includes not just its financial assets but also it’s state land and buildings, are managed by Temasek Holdings and GIC.
Drawing on the past reserves requires the approval of the President of Singapore, who serves as a “second key” in safeguarding our reserves. For example, the current President, S R Nathan, has approved the use of our past reserves to fund land reclamation (a few times since 2001) and land acquisition for SERS projects (27 times since 2002).
In 2008, the reserves were also drawn down for a resilience package to help Singaporeans tide through the global financial crisis.
S&P has recently re-affirmed on Singapore’s long-term AAA rating.
However, I find that MOF’s reasoning is faulty. If it is so simply just need to look at net assets, then even Greece is OK because the value of it’s state assets like land, islands, historical monuments etc is more than enough to pay off its debt.
The main issue is liquidity and short-to-medium term ability to honour debts and liabilities. For example, you can own a million-dollar condo, but if you lose your job and unable to pay back $10K to the bank for your credit-line, you can be made bankrupt and force-sell your condo to pay off the loans.
MOF should have said that Singapore no problems paying off its debts and liabilities into the forseeable future because the majority of creditors (CPF holders) are under special & unique creditor terms such that the debtor (SG govt) can impose unilateral changes in terms & conditions for payback, quantum of payback, interest rates, extension of debt, debt rollovers etc, all wrapped up in the name of protecting the creditors and ensuring the creditors doesn’t spend all his principal money on booze and immoral living.
Therefore, all Singaporeans should be concern how President Nathan has over the last 12 years of tenure has allowed PAP government to dip into reserves 27 times without our knowledge. All these whiles, we have been led to believe the national reserves has only been touched once, only in the last financial crisis. So much cheap talks on “good” governance.
Singaporeans really have to vote carefully for our next President who will "truthfully" give us an annual report or statement on what he has done for the past year, like how much national reserves is being used; the state of our CPF money; new and or re-appointments of key office-holders, and other presidential undertakings and work reports; Singaporeans want fairness, justice, transparency, good governance (not just corporate governance, political governance, but presidential governance too.)
Fortune said that Singapore had debts of US$254 billion (S$307 billion), equivalent to 95% of its gross domestic product (GDP).
MOF (Ministry of Finance) has clarified that the Fortune Magazine’s article is misleading as it only looks at Singapore’s liabilities and not its assets.
MOF maintains that Singapore’s financial reserves are well in excess of its debt and that Singapore is a debt creditor and not a debtor.
Part of Singapore’s reserves, which includes not just its financial assets but also it’s state land and buildings, are managed by Temasek Holdings and GIC.
Drawing on the past reserves requires the approval of the President of Singapore, who serves as a “second key” in safeguarding our reserves. For example, the current President, S R Nathan, has approved the use of our past reserves to fund land reclamation (a few times since 2001) and land acquisition for SERS projects (27 times since 2002).
In 2008, the reserves were also drawn down for a resilience package to help Singaporeans tide through the global financial crisis.
S&P has recently re-affirmed on Singapore’s long-term AAA rating.
However, I find that MOF’s reasoning is faulty. If it is so simply just need to look at net assets, then even Greece is OK because the value of it’s state assets like land, islands, historical monuments etc is more than enough to pay off its debt.
The main issue is liquidity and short-to-medium term ability to honour debts and liabilities. For example, you can own a million-dollar condo, but if you lose your job and unable to pay back $10K to the bank for your credit-line, you can be made bankrupt and force-sell your condo to pay off the loans.
MOF should have said that Singapore no problems paying off its debts and liabilities into the forseeable future because the majority of creditors (CPF holders) are under special & unique creditor terms such that the debtor (SG govt) can impose unilateral changes in terms & conditions for payback, quantum of payback, interest rates, extension of debt, debt rollovers etc, all wrapped up in the name of protecting the creditors and ensuring the creditors doesn’t spend all his principal money on booze and immoral living.
Therefore, all Singaporeans should be concern how President Nathan has over the last 12 years of tenure has allowed PAP government to dip into reserves 27 times without our knowledge. All these whiles, we have been led to believe the national reserves has only been touched once, only in the last financial crisis. So much cheap talks on “good” governance.
Singaporeans really have to vote carefully for our next President who will "truthfully" give us an annual report or statement on what he has done for the past year, like how much national reserves is being used; the state of our CPF money; new and or re-appointments of key office-holders, and other presidential undertakings and work reports; Singaporeans want fairness, justice, transparency, good governance (not just corporate governance, political governance, but presidential governance too.)
posted by Success at
12:07 AM
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