Spotlight on our reserves
By Yuen Kin Pheng, Francis.
The Covid crisis has not only dealt a serious blow to our economy but also seriously affected the livelihood of our people. So far $52b his being drawn down from our reserves and this is unprecedented in the history of Singapore. As the end of this pandemic crisis is no where in sight, it is likely that there will be a need to further tap into the reserve fund in the months ahead.
Foremost in the minds of many people are these questions. What proportion of our reserves does this $52b constitute? Do we have the capacity to spend more if the situation drags on? How much more and for how long? When times are good, although our citizens are entitled to information on our reserves, most are prepared to leave this outside their radar scopes. But under the current situation when digging into past savings is not a choice but a necessity, the need to know the state of our reserves has become particularly relevant.
To begin with, the options available to help combat the crisis and revive businesses and the economy is much wider if we have a big war chest than a smaller one. The common belief is that we have a very large and healthy reserves. Given that this is true, how much of it is available to fight a prolonged crisis? Knowing this would encourage contributions of realistic and creative ideas on how to use available buffer to tackle the crisis now and the challenges ahead.No government has a monopoly of good ideas and talents. To handle this health and economic crisis we need to leverage the collective wisdom of talents available in our community. For this to happen, basic information must be available. It has been said that the status of our reserves is confidential. But this confidentiality must now be weighed against the benefits of more viable options surfacing to help solve our current and future problems. This is an unprecedented national crisis that takes national efforts to get over. We are in it together!
To our people who have contributed to the build up of the reserves, it will also be helpful for them to know how much more capacity we have to withstand a prolonged storm. Knowing this sets people’s mind at ease if the situation is manageable or prepare their mindset for belt tightening if otherwise. Whatever the situation, transparency is the best policy. Our people deserves to know.
Moving forward, there ought to be a robust review of our reserves policy too. Singapore has been criticized for setting aside too much for our reserves, way above normal international practice. We can of course say that this practice has given us the capacity to face the current crisis. But we should also ask if some of the funds set aside in the past could have been used to build a stronger social safety net or a stronger eco system for our SMEs as our engine for growth making our people and businesses more resilient in riding through this storm. Do we take a preventative or curative approach?
In the end, it is a matter of balance between keeping for a raining day and spending to strengthen us in preparation for a rainy day. Meaningful discussion can only be possible if there is transparency of information and willingness to be open to new ideas. Hopefully, the current crisis has taught us some useful lessons.
The author of the above article writes in his own capacity with his views and opinion only to himself and are in no way a representation of the Party.