Turning of the second key went smoothly

This story was originally published in The Straits Times print edition on Feb 20, 2009.

IT HAS taken 25 years, but Singaporeans finally got a glimpse of how a system of checks and balances centred around an Elected Presidency might work.

The idea, first broached by then-Prime Minister Lee Kuan Yew in 1984, wended its way through public and parliamentary debate and two White Papers into the 1991 legislation to allow an elected president to have limited veto powers over spending on national reserves and key public appointments.

Since then, the institution has fostered several constitutional amendments and much public discussion. But until recently, issues surrounding the presidency were academic. All that contention was to prepare for the day when the presidency actually had to do its job: that of safeguarding the national reserves.

The first instance of this came last October, when the Government sought the President’s assent for a standby draw of up to $150 billion to guarantee deposits if banks failed.

More significantly, on Jan 21 this year, President S R Nathan gave in-principle approval to a formal proposal from Finance Minister Tharman Shanmugaratnam to tap past reserves.

The Government wanted $4.9 billion to help fund two special schemes to deal with Singapore’s worst recession since Independence: one to help save jobs and the other to ease credit for companies.

As President Nathan disclosed this week, it took 11 days for the Government to broach the subject, brief the Council of Presidential Advisers (CPA) and the President, and get in-principle approval.

This marks the first detailed disclosure of how the machinery of the Elected Presidency works as it approves a draw on the reserves.

After 25 years of preparation, how has the Elected Presidency stood up to the test of an actual operation?

The short answer: as expected.

In the process, it has also debunked some popular myths.

The mechanism is smooth and well-oiled for such a fledgling institution. As President Nathan himself put it: “I think the system was tested. It responded to the urgency.”

The speed and smoothness of the “second key” to the reserves turning in tandem with the Government’s key, illustrates the capacity of the Government and the presidency to work together to unlock reserves in a time of crisis.

Those who had expected - or hoped to see - an obdurate President blocking the Government underestimate the degree of congruence between the presidency and the Government.

Without casting any doubts on the independence of the institution, you could still argue that the Elected Presidency was always conceived not as an adversarial check, but as a within-the-family check on the executive.

The selection criteria - justifiably stringent given the custodial role over hundreds of billions in reserves - effectively means that any presidential candidate needs senior public sector experience, or has operated at such a high private sector level that he is likely to be considered very much a pillar of the Singapore establishment. Outsiders and mavericks are not meant to get past the Presidential Elections Committee which approves candidates.

President Nathan himself was a senior civil servant for many years. Most of the members of the CPA have spent time in the public sector.

With a common background - and given the indisputable seriousness of the economic crisis facing Singapore - it is not surprising that the President and the CPA concurred with the Government this time on the need for a speedy, unprecedented draw on the reserves.

The Jan 21 approval attests to the presidency’s ability to work swiftly with the Government. What remains untested, however, is what happens when the President disagrees with the Government’s request.

President Nathan made it clear that he would have no problems saying no if necessary: “If they came with scatterbrained proposals I would have said no.”

But would the presidency and the CPA have independent means of verifying the information provided by government ministries on the state of the economy, or on the merits of the schemes which need funding? How might these independent analyses be organised?

This remains in question, even after the Jan 21 decision.

In fact, is it even the President’s role to mount a detailed critique of government proposals to use the reserves?

Saying he was an elected but not executive President, President Nathan said: “As to whether the proposals were right or wrong, we don’t micro-manage Government. And it’s for the Government in power to determine what is to be done.”

The distinction is between a custodial and an executive president: the former exercises powers of a passive nay-saying capacity, whereas the latter is more hands-on.

Those who expected the Elected Presidency to be an alternative policy think-tank would be disappointed - but this was never the intent of the system.

The modest, intentionally circumscribed powers of the presidency are being illustrated in the Jan 21 decision. As seen in the way the two keys turn in tandem, and the comments of President Nathan himself, the presidency was never intended to be an adversarial, alternative centre of policy or political power.

In a way, it is fortunate for Singapore that the first turning of the presidential second key turned out to be so smooth and uncontroversial an event.

Since the case for a draw on the reserves is strong, the spotlight was on the process and procedures leading to the decision, rather than on the merits of the Government’s case for a draw.

The attention on the institution itself is no bad thing given that the presidency is very much a work-in-progress.

What has been established is how well the presidency and the Government can work together to unlock the reserves when needed.

While procedures for the decision-making process have had a chance to be operationalised, what remains untested is the purpose for which the presidency was created: how well the presidency can function to block the Government, in order to protect the reserves.