President cites severe downturn, rapid decline of the economy and need for swift measures to restore confidence
By
Sue-Ann Chia, Senior Political Correspondent
President Nathan at a press conference yesterday where he explained his decision to agree to a drawdown of reserves. He said there was interest during the Budget debate about the process of dealing with past reserves. -- ST PHOTO: AZIZ HUSSIN
PRESIDENT S R Nathan revealed yesterday why he agreed to the first-ever draw on past reserves, citing the severity of the downturn and the speed at which the economy was declining.
It took 11 days for the Government to seek and secure his in-principle approval, with Mr Nathan giving the nod just a day before the Budget was presented in Parliament on Jan 22.
On what PM Lee Hsien Loong told him about the state of the economy
'He touched on the dire economic circumstances, he shared his concerns...He also pointed out...the need to go for extraordinary measures to give confidence locally, and to address the impact it would have on our people, particularly the low-income.'
President S R Nathan asked for periodic briefings by officials from the Ministry of Trade and Industry, Ministry of Finance, Monetary Authority of Singapore (MAS), Government of Singapore Investment Corporation and Temasek Holdings on global economic trends and the state of financial markets. Members from the Council of Presidential Advisers (CPA)* also attended.
NOTHING in the Constitution currently spells out how the Elected President should deal with a request to use past reserves, beyond the need to consult his council of advisers.
President S R Nathan noted this yesterday at a press conference where he explained the steps he took before giving in-principle agreement for a draw on past reserves for the first time.
The swiftness of the process, he said, stemmed from the urgency in giving the Government the confidence to roll out measures to tackle the recession which could worsen without fast action.
'I recognised the importance of giving confidence to go ahead with the measures proposed in the Budget for the particular reference to past reserves bearing in mind (that) if the situation prolongs or worsens, negative consequences would have kicked in, making any measures too late to be of any effect,' he told the Singapore media at the Istana.
He was making public for the first time his decision to allow the drawing down of $4.9 billion of past reserves to fund two schemes: a Jobs Credit scheme to subsidise wage costs in a bid to save jobs; and a Special Risk Sharing Initiative to give companies more access to credit.
Explaining the speed with which the decision was made, he said: 'The urgency was quite evident, and I think 11 days was reasonable. If it had to be, it could have been shorter.'
Mr Nathan also said in response to questions that he need not have held a press conference to explain the decision. He is required only to convey his decision in writing to Parliament in response to the Government's request.
But there was interest during the Budget debate about the process of dealing with past reserves, and questions of when past reserves can be used, he noted.
He made it clear that the steps taken to seek his approval did not bypass procedures and went by the book.
'Whether you take 11 days or one month, the process will be the same,' he noted. 'If we had the luxury of time, we'd have taken much longer. But the circumstances were such, people's confidence had to be restored.'
Read the full story in today's edition of The Straits Times.
