The nation took a deep breath in 2009 when the Government sought the President’s approval to draw a total of $4.9 billion - the first time it had ever dipped into past reserves to help cover Budget expenditure.
The money was used to fund the Jobs Credit Scheme, a wage subsidy given to bosses to keep workers employed, and the Special Risk-Sharing Initiative, which helped cash-strapped firms get credit.
In the end, the recession in 2009 was milder than feared and the Government drew just $4 billion, which it returned to the pot in 2011. No one outside the highest echelons of government knows how much the state has in reserves.
The reserves are managed by the Monetary Authority of Singapore (MAS), GIC and Temasek Holdings. GIC will only say that it manages well over US$100 billion (S$136 billion) of Singapore’s reserves, but foreign think-tanks such as the Sovereign Wealth Institute have estimated that the figure is closer to US$250 billion.
Mr Nathan on his 12 years as president / Reserves used in exceptional circumstances
This excerpt was originally published in The Straits Times print edition on Sept 17, 2011.
In his memoirs, An Unexpected Journey: Path To The Presidency, Mr S R Nathan reveals how he arrived at key decisions on the use of Singapore’s past reserves during his tenure as guardian, including his approval of a $4.9 billion drawdown in 2009.
Govt to return $4b to national reserves
This story was originally published in The Straits Times print edition on Feb 19, 2011.
The Government obtained the President’s approval to draw down $4.9 billion from past reserves to fund special schemes in the light of Singapore’s worst recession since Independence.
The actual amount taken out from the reserves amounted to $4 billion. But in 2011, after a strong economic recovery in 2010 boosted tax collections, the Government put the money back into the reserves.
The keys to nation’s wealth
This story was originally published in The Straits Times print edition on March 20, 2009.
What makes up the reserves? What is in place to safeguard them? Who manages them? How have they been redefined and when can they be tapped?
Turning of the second key went smoothly
This story was originally published in The Straits Times print edition on Feb 20, 2009.
The idea of checks and balances centred around an Elected Presidency was first broached by then-Prime Minister Lee Kuan Yew in 1984. It 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.
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 case for tapping country’s reserves
This story was originally published in The Straits Times print edition on Feb 6, 2009.
Finance Minister Tharman Shanmugaratnam gave two broad reasons for tapping on the reserves. Firstly, marshalling the reserves boosts confidence all round in Singapore’s ability to deal with the crisis.
Secondly, it freed the Government to field a bold and forceful response to an unprecedented crisis, knowing it has adequate resources to call on.
Unlocking more of the reserves’ returns
This story was originally published in The Straits Times print edition on Oct 11, 2008.
In a downturn, tax receipts dip even as the Government needs to spend more to support those on lower incomes.
Where will the funds come from? A proposed change to the Constitution, first floated in 2006 and tabled by Finance Minister Tharman Shanmugaratnam in September 2008 in Parliament, will mean the Government can tap on more of the returns from investing the reserves.
Is protecting the reserves your job too?
This story was originally published in The Straits Times print edition on July 10, 1999.
The Government has always maintained that the reserves are inviolable and to be left untouched unless absolutely necessary. Second Minister for Finance Lim Hng Kiang in 1999 compared protecting reserves to preventing corruption.
But how deeply and widely held is this attitude? Read more here.