Tharman on his independence and how president’s role of safeguarding reserves will evolve

SINGAPORE - Presidential hopeful and former senior minister Tharman Shanmugaratnam was in the thick of action the two times that Singapore unlocked its reserves during crises.

During the global financial crisis in 2008, precipitated by the bursting of the United States housing bubble, he was finance minister and proposed a draw of $4.9 billion from the past reserves to fund a jobs credit scheme and a scheme to encourage banks to lend money to businesses.

And he was senior minister advising Prime Minister Lee Hsien Loong on economic policies during the recent Covid-19 pandemic, when the Government proposed drawing down the reserves to the tune of $69 billion to save jobs and lives. Eventually, $39.7 billion was drawn down and used.

Asked how these experiences will inform his role as president if he is elected, he says considering a draw on the reserves is “never a black-and-white matter”.

He says: “It’s not just a matter of a second key, the Government comes to you, and you decide whether to turn it or not. You’ve got to understand the issues well. You’ve got to have a dialogue with the Government on it. And it helps to have a background where you have been deeply involved in economic policy. In fact, social policies as well are relevant.

“And you have an understanding as to how the reserves have to be preserved in a way that serves future generations, because these crises will keep coming.”

The biggest long-term crisis that Singapore faces is climate change, and adapting to it will require infrastructural investments, he says.

In deciding whether or not the reserves can be used, the president will have to make “considered and calibrated judgments, not just responding in the heat of crisis”.

“How do we be fair to the current generation and future generations, both by protecting and using the reserves wisely in the future? We started now with

Singa bonds for long-term infrastructure.

That may not be the last of them,” he says.

With these challenges ahead, the role of the president in safeguarding the reserves will only get more important, he adds. He was speaking to The Straits Times last Friday about how this role will evolve, and how his track record of independence and his experience in government will help him discharge his functions as president if he is elected.

On how the president’s role of safeguarding the reserves will evolve

The formal executive powers of the presidency will... become more important than before precisely because of the challenges we face: the global challenges, the challenges of climate change, the fact that we not only need to use what we call the NIRC (Net Investment Returns Contribution), the investment income from our reserves, as part of each year’s budget, but we need to make very judicious judgments on how we use reserves for long-term infrastructure which benefits not just today’s generation, but future generations.

And that role is going to be more important than what it was in the past, where we were focused very much on just creating a framework for spending income from reserves and protecting the rest of our reserves. That role of making judicious judgments as we had to do during Covid-19, as we had to do during the global financial crisis, and for being able to invest ahead of time in long-term infrastructure – that role is going to grow.

Unfortunately, the crises are going to keep coming. The pandemics are, unfortunately, already baked into the global system. Pandemics will keep coming. Economic crises will come. Some of them may be geopolitically inspired, some of them may be just a result of poor policymaking around the world, but economic crises will keep coming. So the president has to be, first, knowledgeable, have the ability to understand the nature of the crises and the nature of the challenge we face as a country, and the president must have a vision of the future and the ability to talk to the Government and interact with the Government in ways that ensure that we come to the right solutions. 

On his track record of independence

First, my life is an open book because I’ve been in public life. I’ve said at various points in the past what my beliefs are and what my convictions are and how they started when I was young. I was a student activist – that is well known. I had views different from the Government at the time. I evolved my thinking without becoming less idealistic all through the years. That practical idealism has remained with me all through the years.

But I started young as an idealist and I was always looking for solutions. I’ve stated my views on matters where I disagreed with government actions, including the 1987 arrests – everyone knows that. I went through the OSA case and refused to plead guilty because I knew I hadn’t done anything wrong. (In 1992, Mr Tharman, who was then at the Monetary Authority of Singapore, was charged with breaching the Official Secrets Act over the leak of the preliminary estimate of Singapore’s economic growth, but pleaded not guilty, and was eventually fined $1,500 for negligence in handling a classified document at a meeting.) I made a decision to stay in the system and fortunately, as a non-scholar, I was able to rise to the highest levels of public service. And I made a decision, an adult decision, to enter politics and to join the Government because, having spent half of my 40-plus years of service to the public in the civil service, I wanted then to spend the rest of my time being able to serve on the ground with people, to help create initiatives on the ground. 

And second, in Government, in rethinking policy. I was very keen to rethink educational policies, our social policies, our economic policies. And I knew I could only do that if I became an MP on the ground and joined the Government. That was an adult decision I made, despite my past, but it was the same me informed by the same practical idealism. And I made that adult decision to join the Government so that I could contribute even more to Singapore. People know, within government, within the civil service as well as amongst my colleagues in Cabinet, and people know outside, even the opposition knows that I have convictions of my own.

I think it’s worked extremely well in government, because what is not very well known outside government is the amount of debate we have within Cabinet. We spent hours debating issues: the objectives, the shape of policies, even the details. Sometimes after those hours, we still can’t agree, we come back the next week, or the week after, and continue. And that’s the strength of the Singapore system: You’re able to debate issues from different points of view in government. And my views have always been taken seriously, like my other colleagues’, and we often differ in our views.

That debate is essential in coming to a consensus. Sometimes we don’t come to a complete unanimous consensus, but we reach a decision that is a collective decision. And that discipline of the Cabinet of sticking to the collective decision is there. Now that I’ve stepped out of government and stepped out of politics, of course I’m no longer following a collective decision, I’m not held to collective decisions, so on all the matters where the president has executive responsibility, I have to exercise that same independence of mind that I’ve had all the way through.

But I do want to point this out, that it’s really been a strength of the system (that) I’ve not had to compromise, all these years in government. I’ve never had to compromise my values and my basic motive for being in politics, which is to build a fairer and more socially just society. We debated every issue, and I think we have shifted the ground of our policies very significantly in the last 15 to 20 years. And that was a process of debate, the consensus building, that was extremely important and which I was a very active member of.

So when I say I am independent-minded, this is not something that I’m suddenly springing up with because of the presidential election. It goes back to my youth, it goes back to my career in the civil service, including the ups and downs I had, and how I stood my ground all the way through. And it goes back to the last 20 years, the second half of my service in government itself. That’s the way we operated, and that’s the way I operated.

On what this independence will mean in the context of the presidency

First, I would have a lot more leeway as the president compared to being a minister in Cabinet in supporting and working with initiatives on the ground, and working with civil society to further what I believe is extremely important in the next phase of our development as a society: developing that culture of respect for ordinary people, for people who need a second chance, for the elderly, for people with different views and, of course, for different ethnic traditions and our different religions. I will be able to play that role much more actively than before.

Second, on the executive powers of the presidency, second key powers, it’s critical that you continue to have an independent mind. But it helps that you have a deep understanding of the system to begin with, it helps that you are respected by the Government as well, and it helps if there’s some relationship that comes from both sides knowing that we’ve got to understand the issues first, and we’ve got to understand the challenges, and we’ve got to be focused on finding solutions for Singapore so that it’s not about individual stances that we take.

The presidency must never be about just taking an individual stance, or disagreeing or agreeing just for the sake of it. The presidency has to be about understanding the challenges that Singapore faces and coming to a judgment as to what is necessary. And there may be times when the president comes to a different judgment. It may not be a fundamental difference, it may be a difference on the scale of intervention required, but that’s what it involves. That’s what the independence involves.

It involves also being able to make those judgments that involve the second key, but doing so in a way that allows you to retain trust between the presidency and the Government. If that trust breaks down, then the role of the presidency in representing Singapore internationally becomes severely weakened, becomes perfunctory, and you’re not going to be taken seriously by other countries if they see you as just being someone at loggerheads with the Government.

On how he intends to ensure Singapore’s international standing when he is no longer in Cabinet

In fact, in most of the councils or expert panels I’ve led, I have been the only person on the panel who was a current serving minister. So I wasn’t appointed simply because I was a minister. In most of those instances, they were independent high-level panels and I was the only person who was a serving minister. The rest were former ministers, academics, eminent people. And I think that standing I have remains because I wasn’t there only because I was a minister.

In other words, it’s a combination of you putting in the effort to master the subject, understand how it is viewed, how the issues are viewed around the world, understand the challenges other countries face, understand the nature of the global challenges that we all face – that remains extremely important. And you’ve got to put in the work and show to your colleagues and peers that you’ve mastered the area and you can bridge differences of views. The fact that I come from Singapore has always been a huge plus because people respect Singapore.

So I’m not just there as a minister, because I was typically the only minister on these panels, but I was there because people had some regard for my views, as well as my ability to bridge differences of views across contending parties. So I think that role can continue. 

But I will serve on panels or councils where it’s in Singapore’s interests, as I’ve been doing so far. All the issues to do with global financial reform, the global water crisis, the Human Development Report, which I’ve been co-chairing with some Nobel laureates, they’re all issues that are close to Singapore’s interests.

On why he thinks he can help build a culture of respect as president and why he doesn’t just do it as part of the Cabinet

I think things are well entrained now in the Cabinet in terms of the shift in our policies. In stepping out, it doesn’t mean I no longer have private conversations with the prime minister. The president can have private conversations with the prime minister as long as there’s some trust between them, and some respect between them. So that can carry on.

But second, I think as president, I’ll have a lot more leeway to actively support initiatives on the ground, which I intend to. We’re not going to develop a stronger social compact and this deeper culture of respect that underpins a stronger social compact top-down. The policies are critical, the move towards fair and progressive social fiscal policies has been very important and will carry on. But it requires civic action. It requires ordinary people interacting in a way that, after a while, you realise you’ve created a different culture. Without that culture, if you’re just relying on government policies, nothing lasts. Nothing lasts.

On how he wants to engender respect for different political leanings

Well, the president should not get into politics, the president has to be above the fray. But given my own background and track record, which even the opposition knows about, I think I’m well placed to symbolise that spirit of always trying to bridge differences.

My continuing interactions with people, without having to be in politics, will help foster that culture of everyone staying quite close to the centre of what is necessary for Singapore – avoid the extremes, stay close to the centre, don’t exaggerate your differences. We are often closer together than you think we are, as I’ve said before, by the way, even in Parliament.