The Singapore Business Federation has made some bold suggestions in its recent economic transformation proposal ("SBF outlines new routes to growth"; Jan 7).

The suggestion to unlock Central Provident Fund monies to invest in the stock market could be a feasible idea ("'Use CPF money to help liven up local stock market'"; Jan 7).

But caution is needed.

When the United States market collapsed in 2007/2008, the US government pumped in billions every month to prop up the stock market, in the belief that a healthy stock market correlated with a healthy economy.

It is debatable if that effort benefited the country and its people. Businesses were still closing down and people were still losing jobs.

SBF's proposal to use CPF monies for stocks seems to lean towards the same belief.

The benefits, as postulated in the proposal, are to develop local companies, revitalise the stock market, help companies raise funds, promote entrepreneurship and create liquidity.

All this adds to a vibrant bourse.

And if local companies prosper, jobs can be created.

As we consider the proposal, we should ask some questions.

Would the freed up CPF monies still be managed by GIC or will Singaporeans be left to make their own choices?

Would the funds injected into local companies really help prop up the local stock market and result in job creation?

Is there a predictive model or analytics conducted by other countries? We could learn from them to identify and mitigate risks.

Tan Kar Quan