The only way is to ride out rising prices, but a cooperative supermarket like FairPrice can counter any market manipulation and ease the pain of food price hikes for Singaporeans.

The 70-year-old economics-trained retired civil servant was speaking at a bi-monthly Pioneers seminar at the Arts House, organised by the EDB Society and The Straits Times.

Mr Ngiam criticised the recent move by the Monetary Authority of Singapore (MAS) to let the Singapore dollar appreciate against a trade-weighted basket of currencies.

This is an attempt to moderate inflation, which hit a 26-year high of 6.7 per cent in March.

MAS' move amounted to 'force-marching the economy', he said. 'You can't order an economy that way.'

He warned that it could lead to a repeat of the mistakes which led to the 1985 recession, from which Singapore took four to five years to recover.

In that recession, rising wages and a strong Singapore dollar were what economist Tan Kong Yam called 'twin blades' that cut away at competitiveness, he said.

In a Straits Times interview earlier this month, Mr Ngiam had asked MAS to study the 1985 experience, saying: 'Prices in the world are rising, whatever you do. A strong Sing dollar is not going to matter one bit.'

Yesterday's seminar was chaired by Singapore Press Holdings' English and Malay Newspapers Division editor-in-chief Patrick Daniel, who worked under Mr Ngiam in the 1980s at the Ministry of Trade and Industry.

At the start of the 1980s, Singapore also faced rising prices, recalled Mr Daniel. Inflation was 8.5 per cent in 1980 and 8.2 per cent in 1981.

Could one take a leaf from some of the micro policies deployed at the time to correct inflation, or should Singapore stick to macro adjustments, he asked.

He related how Mr Ngiam, as chairman of a committee tasked to look into inflation, had pored over the prices of items in the Consumer Price Index then. The index measures changes in the prices of a basket of goods and services.

Alarmed by a spike in onion prices, Mr Ngiam asked for alternative sources of onions to be found to avoid relying on one supplier.

'Lo and behold, onion prices fell after that,' said Mr Daniel.

Laughing at the memory, Mr Ngiam said the committee 'was just a public relations exercise', because 'as the Government, we must be seen to be doing something'.

In reality, 'no government can fight inflation', he argued.

He cited the global oil crisis of 1972, when other countries tried to curb roaring inflation with kerosene-price subsidies.

'Hon Sui Sen, who was then finance minister, had the guts to say, 'We will swallow our medicine in one gulp'. We won't subsidise oil prices; we will let the inflation work through the system.'

Neither could the burden of fighting inflation be put on wages, he argued, as 'you can cut CPF only once'.

Indeed, the best anti-inflationary weapon the Government has is FairPrice supermarkets, said Mr Ngiam.

The cooperative was set up in 1973 to counter local importers who formed cartels to jack up prices of essential food items.

clare@sph.com.sg