Singapore not 'oversaving' with reserves 'barely keeping pace' with its economy: DPM Wong

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RESERVES BEING USED IN OTHER AREAS

The NIRC supports about one-fifth of the government’s spending, making it the largest single contributor to the Budget.

“Sometimes we think that the reserves are there only for future emergency,” said Mr Wong in his CNA interviews. “But in fact, the reserves are also an endowment providing for today’s needs and all of us are benefiting from it right now.”

Mr Wong, who is also Finance Minister, said Singapore runs a “structural deficit” of about 3 per cent of gross domestic product in its primary fiscal balance.

This gap is currently covered by the NIRC. Without that, Singapore “would have to cut back on almost 3 per cent of GDP of spending”, he added.

“That’s a lot. It will mean less public housing for Singaporeans. It will mean less infrastructure. Our trains, our buses – we will have to cut back on services,” said Mr Wong.

“This is tightening of the belt to an extent that no one has ever felt before.”

The reserves are also being tapped for a range of other needs, such as special drawdowns in times of crisis.

Singapore first tapped on its reserves in 2009, taking out S$4.9 billion (US$3.6 billion) to support the economy through the global financial crisis. Over a decade later, it drew on the reserves on three separate occasions during the COVID-19 pandemic between 2020 and 2022 – using about S$40 billion in all.

“The only alternative would have been to borrow, which is what most other countries do,” said Mr Wong, who was co-chair of the country’s COVID-19 multi-ministry task force.

“When you borrow, you have great uncertainty. And therefore, I think it would have impacted the swiftness and the decisiveness of our response,” he added.

Citing how Singapore was the first in Asia to secure the Pfizer-BioNTech’s COVID-19 vaccine, Mr Wong said the reserves had played “a critical role” in making that possible.

“I have no doubt that without the reserves, we would have ended up with more lives lost to COVID-19, and certainly we would have ended up with a much higher unemployment.”

The country’s reserves also play a key role in funding major infrastructure and land reclamation projects, such as the Changi Airport Terminal 5.

Noting that land reclamation projects are “costly” with benefits only apparent over the long run, Mr Wong said: “Without the use of past reserves for land reclamation, we would likely end up borrowing or using our own current resources. That would certainly be a bit of a constraint.” 

However, he stressed that one “should not get the mistaken idea that this is a draw on reserves”.

“Because when we use past reserves to create new land, the land is also protected as past reserves. And when we create the land and eventually sell the land for development, those land proceeds go back to the reserves again,” Mr Wong said. 

“So from that point of view, it’s really just a conversion of assets from finance to land, and then back to finance.”

Watch PM Lee’s interviews on the reserves from Aug 16 on CNA’s YouTube channel and the Web-exclusive episodes of Singapore Reserves Revealed from Aug 17. The two-part TV documentary Singapore Reserves: The Untold Story will be broadcast on Aug 16 and 17, 9pm SG on CNA. The documentary will also be available on the CNA Insider YouTube channel.

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Relocation of Indonesia's capital city 'one of the biggest question marks' of Jokowi's leadership: Analyst

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Even as Indonesian president Joko Widodo underscores his presidential achievements as he approaches the end of his term, his plan to move the country’s capital from megacity Jakarta to East Kalimantan will be “one of the biggest question marks” of his leadership, an analyst said on Wednesday (Aug 16), following Mr Widodo’s annual State of the Nation Address ahead of the country’s 77th Independence Day.

The proposed new capital, Nusantara, is the flagship project of Jokowi, as the president is popularly known, and is expected to be a green, smart city spanning nearly 260,000 hectares. It will take a vast sum of money to partially bring the plan into fruition, Emeritus Professor Greg Fealy told CNA’s Asia Now.

“As much as Jokowi wants it to be his signature element of his 10-year presidency, I think once he leaves office in October next year, his successors are going to have to look at this very closely,” said Prof Fealy, from the Department of Political and Social Change at the Australian National University

“It’s going to absorb so much money and that money could potentially be used for a whole lot of other things that will deliver a bigger dividend for Indonesia nationally.

While Mr Widodo is likely to be able to partially open the new capital, which is slated to be officially declared in the first half of 2024, there are “increasing doubts” on whether the full plan of the capital city relocation will take place, he said.

The project has attracted very few international investors and will create enormous pressure for Indonesia if the country has to fund most of it independently, he added.

The relocation is expected to come with a price tag of US$34 billion.

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New Enabling Services Hub to offer more community support to those with disabilities, caregivers in Bedok, Tampines

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SINGAPORE: Mr Shawn Lin lives with Down syndrome and has spent much of the last eight years at home, passing his time by watching television shows.

His father Stephen Lin told CNA that after the 34-year-old graduated and finished his workshop at social service agency MINDS and Thye Hua Kwan Moral Charities, “we had no other avenue where we could place him”.

Things are different now, after the Society for the Physically Disabled (SPD), a social service agency which advocates for people with disabilities, introduced the family to the Enabling Services Hub.

SPD and SG Enable launched the facility in Tampines West Community Club on Monday (Aug 14), to help residents with autism or intellectual, physical and sensory disabilities make friends and learn while having fun.

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'Oversimplification' to label UMNO a liability to PM Anwar’s ruling coalition, says party leader

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KUALA LUMPUR: While the United Malay National Organisation (UMNO) has undeniably faced challenges in recent times, it is an “oversimplification” to label it a “liability” to the ruling coalition based on the recent state polls, says its secretary-general Asyraf Wajdi Dusuki.   He adds that cooperation between Prime Minister AnwarContinue Reading

'Biggest misconception' to think that Singapore will always have enough reserves, says PM Lee

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SINGAPORE: Singapore has enough reserves “for most circumstances”, but it would be the “biggest misconception” to think that will always be the case with the country’s spending needs already outpacing revenue growth, said Prime Minister Lee Hsien Loong.

Mr Lee also said he is “anxious” about continuing to build the reserves for as long as possible. The country’s fourth-generation (4G) political leadership is aware of the growing spending needs, as well as the need for Singapore to provide for that “in a sustainable way”, he added.

The Prime Minister was speaking to CNA in an extensive interview on the country’s reserves. 

He described the reserves as a “great source of comfort and reassurance” that provides Singapore with “one extra card to play” should it run into a tough spot.

The government does not disclose the full size of the reserves to protect national interests and prevent speculative attacks on the Singapore dollar.

When asked how much is Singapore’s reserves, Mr Lee said: “I can’t answer that question. It’s enough for most circumstances. It’s enough to give us a substantial support in the Budget every year contributing to the government’s revenues.” 

The country first tapped on its reserves in 2009, taking out S$4.9 billion (US$3.6 billion) to support the economy through the global financial crisis. Over a decade later, it drew on the reserves on three separate occasions during the COVID-19 pandemic between 2020 and 2022 – using S$40 billion in all.  

“Fortunately, we had the resources and we could do it,” said Mr Lee. “It’s a great blessing.”

But the “biggest misconception” that Singaporeans can have about the reserves is that “there is such a thing as enough”.

“How much is enough? If I have more than that, I can spend it. If I have less than that, well, maybe I hope we get there,” he said. “I don’t know how much is enough.”

“Before the global financial crisis, we didn’t think we will need anything. When (it) came, it turned out we needed S$4, S$5 billion. When the COVID-19 crisis came, in the end we needed S$40 plus billion. So you have no idea how much you will need.”

And COVID-19 is “far from the worst thing that can happen” to Singapore, he cautioned. Hence, the “more productive way” to look at the reserves would be to think of it as “rainy day money”. 

“If it’s not raining, I don’t touch it. If it’s a sunny day and I can afford to, I put a little bit more into it,” he said. 

“However much there is, I keep on having this attitude that I would like to build it up a little bit more when I can, so that the next generation will be in a more secure position than I am today.”

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Analysis: Strong state poll performance by Perikatan Nasional boosts stock for some PAS leaders, but obstacles lie ahead

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SANUSI’S IMAGE BOOSTED 

PN won 33 out of the 36 seats contested in Kedah, an improvement from the 20 seats it held before the state legislative assembly was dissolved. 

Political analyst Dr Azizuddin believed that Sanusi’s image has been boosted among PN supporters – particularly that of PAS – after the coalition’s resounding victory in the state.

“Pakatan Harapan (PH) really put a lot of focus on Kedah and although Sanusi was attacked, he was able to counter these attacks, with the unity (government) unable to sway the votes. 

“This has boosted his image and he will go for a higher position in the party. There is already talk that he will contest as deputy president in their next party election,” Dr Azizuddin told CNA.   

During election campaigning, Sanusi was on the receiving end of relentless attacks by Home Minister Saifuddin Nasution, who is also from Kedah.   

Mr Saifuddin had on occasion linked Sanusi to the alleged theft of rare earth elements in Bukit Enggang, Sik.  

Sanusi – who has been compared to former US president Donald Trump and former Filipino president Rodrigo Duterte by many for his tendency to shoot from the hip – however took all these attacks in his stride and even launched counter attacks on his political “enemies”, including Prime Minister Anwar Ibrahim.  

In the past, Sanusi has even taken on Johor crown prince Tunku Idris Ismail, with a spat between both of them taking place on social media.  

Earlier in July, Sanusi was charged with two counts of sedition for allegedly insulting Selangor royalty, but many believed that he was able to use the cases to gain public sympathy.  

Meanwhile, Dr Ahmad – the Terengganu chief minister – has also gained plaudits after leading PAS to a 32-0 win in the state election.  

Unlike Sanusi, Dr Ahmad – who is an aerospace engineer by trade – did not resort to insults against his political opponents and was seen by observers to be a more inclusive person.

Political analyst Ibrahim Suffian of the Merdeka Center for Opinion Research believes that it is still early days to talk about succession in PAS as it was a more structured process and would require consensus from the party’s religious wing known as the Shura Ulama Council. The council is the highest decision-making body in the party.     

Both Dr Samsuri and Sanusi are vice-presidents within PAS, considered to be the third-highest rank in the hierarchy of the party. 

“Sanusi and Samsuri are high up, but both are seen as technocrats and not ulama. There might be some pushback from the religious faction,” he said. 

CNA has contacted several high-ranking PAS leaders including Sanusi for comment. 

White Rook Advisory senior advisor Dr Zaharuddin Sani Sabri said that while PAS could leverage Sanusi’s popularity to strengthen its position and advance its agenda, there were those in the party who were not in favour of the Kedah chief minister’s brash style of politics, and that this could generate internal tensions within the different factions in PAS.

“PAS is dominated by two groups – the technocrats and the religious faction. The technocrats and even youngsters might be okay with his style but for the religious group, his style would not be in line with the practise of Islam,” he said, adding that Sanusi’s comments about royalty may also cause discomfort for some.

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Approached to run for President in 2011, former minister George Yeo offered himself as 'emergency spare tyre'

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“I HAVE A CHOICE”

Without holding any public office, Mr Yeo, who sits on various boards and is a visiting scholar at the Lee Kuan Yew School of Public Policy, said that he is now free to decide which engagements he should take up.

“If I feel that I can add value to a person or to an organisation or country, I try to do so, but I have a choice,” he said.

“It’s for me to decide and that’s nice – maybe a bit selfish, some may say. I tend to maintain a balance between what I do to make a living and what I do to help others.”

The former Foreign Affairs Minister served for 23 years in the Singapore government. He also headed the ministries for Information and the Arts, Health, as well as Trade and Industry.

In the 2011 GE, he lost his parliamentary seat in Aljunied GRC to a Workers’ Party team headed by Mr Low Thia Khiang.

Mr Yeo then joined Kerry Logistics Network and was its chairman and executive director from 2012 to 2019.

‘GUILT REACTION’ BEHIND POPULARITY 

In his book, he attributes his popularity as a politician to a “guilt reaction” following his electoral loss.

“I consider it a great blessing because there’s a lot of kindness in the request,” said Mr Yeo. “I feel that it’s nice to be surrounded by positive energy … a part of me says that if I had not lost (the 2011 election) I would not have inherited this positive energy.”

While not putting his hand up for the Presidential Election, he has agreed to be a character reference for one of the presidential hopefuls – former GIC chief investment officer Ng Kok Song.

Mr Yeo posted on Facebook on Aug 2 that he was hosted to dinner by Mr Ng – who he described as an “old friend and colleague”, and his fiancee Sybil Lau.

“I told him earlier that I would not be involved in campaigning for the coming Presidential Election but would be honoured to be one of his character references,” he wrote in the Facebook post.

Mr Yeo told CNA and TODAY that he knew Mr Ng from his time in public life and also met him socially. He had recommended Mr Ng to the Vatican to help them on financial matters, specifically the management of funds, describing him as an “authority on the subject”.

On how Mr Ng sought his support to run for President, Mr Yeo said that a few weeks ago, Mr Ng asked to meet him and drove to his house in a “beat-up Lexus” which had dents on it. 

Mr Yeo’s son was going out and mistook Mr Ng’s car for his private-hire ride. His son opened the back door of Mr Ng’s car and asked “GrabTaxi?” and Mr Ng told him “anywhere in Singapore for $10”, Mr Yeo recounted with a smile.

“DON’T WANT TO TAKE SIDES”

After the misunderstanding was cleared up, it turned out that Mr Ng had come to ask for Mr Yeo’s support in the Presidential Election. But Mr Yeo did not want to take sides.

Mr Yeo pointed out that former Senior Minister Tharman Shanmugaratnam – also a presidential hopeful – is an old colleague and at one point worked with him in the Ministry of Trade and Industry.

Mr Yeo entered politics in 1988 while Mr Tharman was first elected as a Member of Parliament (MP) in 2001. The two men were in the Cabinet together, from around 2003 to 2011.

“I said I don’t want to take sides on this, but I’d be happy to be a character reference,” said Mr Yeo. “I can be Tharman’s character reference too but he doesn’t need me.”

On Mr Ng, he said that the 75-year-old will make a good President, adding “he has all the qualities”.

When asked if he is concerned that he is seen to be supporting Mr Ng, Mr Yeo said: “It’s good to have a contest.

“If it’s a walkover for Tharman, I think he will be a weak President but if he has to fight to become President, and he has the mandate of the entire people, then he is better able to be a custodial President.

“So a fight is good – whether it’s Tharman or Kok Song, I think it will be a President I will be proud of.”

Answering a question on the elected presidency, which was introduced in 1991 with the aim of safeguarding Singapore’s reserves, Mr Yeo said that he thinks it’s a “bit clunky” because the system comprises the President and the Council of Presidential Advisers (CPA), and under certain circumstances, the President “can be overridden”.

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Must-watch: Singapore Reserves Revealed gives exclusive insight into the country’s rainy day fund

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The series will look at:

Singapore’s hidden wealth: Where exactly are Singapore’s reserves invested? How much exactly is in the reserves, and how does buying a cup of coffee in Korea actually contribute to the overall pot?
  
The “inheritance” that almost didn’t exist: Letters found in the UK archives reveal the untold story of how the reserves came to be, and how Singapore fought fiercely for the right to control its reserves.

The inner workings of GIC and Temasek: Our cameras go behind the scenes at GIC and Temasek, and we meet the men and women responsible for growing Singapore’s reserves, and the difference their jobs make.

President, we have a problem: Through first-hand insider accounts, we tell the untold story behind the two rare occasions that the Singapore government made huge drawdowns of the reserves – the 2009 global financial crisis and the COVID-19 pandemic.

Singapore’s secret weapon: How the reserves fuel many of the systems that make Singapore tick like clockwork, from keeping supermarket prices stable, to growing the CPF retirement funds of Singaporeans, to creating more space in land-scarce Singapore. 

We also feature an exclusive interview with Singapore Prime Minister Lee Hsien Loong on the reserves. Responsible for many of the policies that govern how the reserves are protected and used today, the Prime Minister gives us his take on Singapore’s reserves from his front-row seat.

You can watch the interviews with PM Lee on CNA’s YouTube channel from Aug 16 morning.

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Growing demand for high-security storage facilities in Singapore, as more ultra-rich safeguard prized assets

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Wearnes Automotive’s general manager Sebastian Tan told CNA: “We have a very stable government, you know, everything is very black and white.

“They (the clients) feel safe when they put their assets here in Singapore, because they are not afraid of the legislation changing and then their cars getting stuck.”

The venue’s dual purpose as both a storage and gallery space, also lets it play the role of a broker.

Mr Tan said some clients will request help in sourcing for buyers on their behalf, as the company has a broad network of contacts, including people who use Singapore as a stopover given its location as a regional hub.

Such deals are done privately and in a safe environment as the company deals with them directly, he added.

While there are currently 40 cars in the gallery, Mr Tan expects the total to rise to more than 50 by the end of next year.

“People have started making reservations to ensure that they have slots when the car comes over,” he said.

“We do see that a lot of car makers towards the tail end of their production (are) trying to deliver cars that they should have been delivering 18 months ago.”

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Lucasfilm to shut Singapore operations due to 'economic factors' affecting industry

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SINGAPORE: Lucasfilm is winding down operations in Singapore after nearly 20 years in the country, with parent company Disney citing economic factors affecting the industry. Lucasfilm’s visual effects and animation studio, Industrial Light & Magic (ILM), has been operating in Singapore since 2006. The studio was founded as Lucasfilm Animation Singapore in 2004 toContinue Reading