Parliament

Reserves have allowed S'pore to deal with crisis without need to borrow

Mr Heng urged Singaporeans not to take the limited resource for granted. ST PHOTO: NG SOR LUAN

Unlike other countries, Singapore can depend on its national reserves and did not have to borrow or take on debt to fund its Covid-19 stimulus packages, said Deputy Prime Minister Heng Swee Keat.

He was speaking about the role of past reserves, which many MPs touched on yesterday as they spoke about the Fortitude Budget and the ones before it, which draw $52 billion in all from the reserves.

Mr Vikram Nair (Sembawang GRC) likened the reserves to a golden goose" to be protected, warning that the more it is drawn on, the less there will be for future generations to depend on.

Agreeing, Mr Heng said the reserves are Singapore's "rainy-day fund" and have allowed the country to deal with the crisis from a position of strength.

It not only assures Singaporeans that the country has the means to navigate the challenges ahead, but also fosters confidence in global investors, and protects the economy from detractors and speculators who may otherwise try to take advantage of this period of flux to attack the Singapore dollar.

Mr Heng added that a draw of $52 billion from the reserves is not a trivial matter, and urged Singaporeans not to take the limited resource for granted. Singapore managed to build up its savings as successive governments have put in place policies that discourage waste or over-consumption, and also run the public services based on outcomes and not the size of spending.

Among MPs who spoke, several including Ms Foo Mee Har (West Coast GRC) asked if there were plans to return the $52 billion drawn from the reserves, and how long this would take.

Mr Heng said there is no legal or constitutional obligation for the Government to do so, though it had put back the $4 billion drawn from the reserves during the global financial crisis in 2009.

"How long would it take to build this back? We cannot be definitive. At this moment, we must focus our minds fully on making the best use of the resources that we have deployed, be prepared to work hard in the years to come, and have the resolve to rebuild our economy," he said.

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A version of this article appeared in the print edition of The Straits Times on June 06, 2020, with the headline Reserves have allowed S'pore to deal with crisis without need to borrow. Subscribe