I am grateful for the following question left in my comments:
Kenneth, if Roy wishes to contest a future election under your party flag, will you accept him? Or will this “extraordinary Singaporean”, IMO a potential time bomb and a liability for any party, suddenly not be so extraordinary anymore?
As it required a thoughtful answer and more space I answer it here.
The short answer is Yes. Feel free to skip the longer rationale.
BTW this is not my Reform Party blog so I don’t answer here as a politician but as an economist. That question also requires me to speculate as Roy will no doubt get fined and banned from standing and it would depend on who he is 5-10 years from now and what he does in-between so I can’t comment on future elections.
I’m sure he will continue to be extraordinary,though. The only ticking time bomb I see is LHL himself and his wife’s continued role as head of our SWF. This kind of situation and the whole PAP set up has reached the end of its shelf life.
So all other things being equal yes, Roy in very broad strokes, would be welcome.
In reality it wouldn’t be my decision within the Party. Reform is not a fiefdom it doesn’t have Cadres and a system where only a few get to vote. It is set up as a representative democracy and decisions as to whether or not a person is approved after probation are not mine to make.
That is not to say that I don’t get annoyed that Roy makes many basic errors with statistics, methodology and even giving wrong figures. Kirsten Han dealt with this is in a news article she wrote where she explained why I support Roy even though I don’t always agree with him. He has the broad brush strokes right and the heart. I could supply the maths and the economics. Then again so many commentators do get the figures and methodology wrong. As for the PAP, as my breakdown of the budget shows, they cannot add up but that may be deliberate misdirection rather than basic incompetence. I prefer to think it is both.
Do you not realise that unaccountable governments are the ticking time bombs? Do you not understand the danger in not having an early warning system and a lack of oversight that can allow anything, including hidden losses, to fester? Can you point me to any set of figures or accounts that shows conclusively where our money is allocated within our Sovereign Wealth Funds and in what quantities? The Norwegian people can.
Certainly most recently Roy has been writing as though he has nothing to lose as he is under great pressure but after all Roy was always just asking for his elected representatives to be accountable to the people who elected them. Nothing wrong with that.
The only liability I would envisage for our Party is that we exist to form an alternative government and Roy seems rather too fond of the current government.That’s a cultural clash. I’m not convinced he is truly committed to voting all the PAP out and he may be one of the many who mistakenly believe the PAP government can be persuaded to work with them and respond to citizen pressure.
In fact your question is the hypothetical equivalent of asking me whether I would accept JBJ to contest an election under our Party flag with his criminal record and recently paid off bankruptcy. Or whether I would accept Dr Chee. Both could have been called ticking time bombs and liabilities. Both like Roy subjected to the most extreme and concerted character assassinations and smear campaigns. Something I am no stranger to either.
No offence to you but I am not sure why people persist in asking me questions such as yours as though they cannot read the writing on the box or as though they think I write and do what I do for some kind of stage effect? Do they think I sit on a fence, wait to see which way the tide is turning and then leap? Do they maybe imagine that as an economist who espouses feee market principles rather than the usual marxist/socialist ones that I must also be far right wing and authoritarian or opportunist?
I am sure I am seen as a ticking time bomb and a liability but over time we have seen how the PAP are being forced to pick up my ideas and implement them one at a time.
Those who demand accountability and point out discrepancies and conflicts of interest should not be seen as ticking time bombs. Rather they should be regarded as sniffer dogs who find the time bombs and assorted nasties that might lurk underneath the gleaming facade. In the time-honoured manner of authoritarian governments the PAP and PM Lee seek to deflect the tough questions and make the issue about the sniffer dogs rather than the lack of accountability. Unfortunately Singaporeans have been so brainwashed by fifty years of indoctrination and the systematic demolition of those who stand up to demand answers that they allow those in power to escape scrutiny by this reversal. Roy and others like him become the potential time bombs and not our whole secretive and unaccountable setup riddled as it is with serious conflicts of interest.
The basic premise of this blog is and always will be, that freedom is actually good for the economy and that liberal policies not authoritarian ones are the best way forward for a better standard of living for everyone. You can’t uncouple the freedom from the prosperity equation. People like Roy are hugely beneficial to our society’s progress and not detrimental.
I write that as a liberal and as an economist.
Many of you will have seen Roy’s latest blog piece by now. You will also have seen a letter put together by some concerned supporters including me that was published in the Asian Sentinel and later by TOC. I was particularly struck by Roy’s reference in that blog to the S$2,000 fine that stops a Singaporean from standing for election for 5 years and his mention of the S$8,000,000 suit and being an ordinary Singaporean.
Being a couple of decades older than Roy and being related to one of our historical law suit defendants allows me to add some personal insight into those proceedings and their results. I will also explain my reasons for continuing to support Roy, why he should not lose faith and why you all, previously so numerous in your support, should not now be silent.
Right now Roy has become his own sideshow and a distraction from his own message. None of that is his fault of course. This is the way the PAP machine works and is typical of the way in which the PAP undermines its opponents and silences dissent. Truly it’s not healthy for any society to have no debate or dissenting counter view.
Let’s not get distracted from the key issues. The one big, basic question has still not been answered. Why is the CPF minimum sum being raised? The one big fear that is not being dispelled is the fear that the minimum sum has been raised because GIC and/or Temasek has lost money and the government needs to get the money from somewhere else.
In fact this use of a sledgehammer to crack a nut, as we see with Lee junior versus Roy, will only increase that fear. Or it should at least increase our suspicions. As I always say if there is nothing to hide then throw open the books for inspection! It comes down to trust between the people and the government which is at an all time low. Instead of taking steps to rebuild that trust our PM has sued a blogger. Don’t get distracted. See what is really happening here, what is really at stake?
The fact is that the issue of Temasek Holdings investing or managing CPF money has not been satisfactorily explained. Temasek say they don’t do it. This is simply sophistry. It is half a lie and wholly economical with the truth. Money that the government receives from CPF savings goes to GIC and the profits that GIC earns investing those funds, swells government surpluses, enabling the government to inject more capital into Temasek. Furthermore Temasek’s own internal rates of return – that it is supposed to earn on new investment will no doubt be related to CPF interest rates. Like everything else we have no disclosure on this but trust me, this is how it is done.
The irony is that Roy was not even, judging from his earlier writing and blogs, that strong an opponent of the government/PAP. (Well he wasn’t before all this) Let me explain. He was an opponent of the way CPF returns to the citizens had to fight with GIC’s and Temasek’s need to make profits. So if more money was paid out then GIC’s track record went down. If less was paid back to us then GIC made a bigger profit. He objected to the system that allowed this conflict, as he quite rightly saw it..
If you read his blogs, watch his videos, went to hear him speak, he was more often to be found talking in terms of campaigning for the government to reform the system, asking the government to be more fair, asking the government to put the people as a priority, not the profits of Temasek and GIC. In fact when you look at Roy’s speeches and writings it is very much about the government. For goodness sake the Facebook page attached to his blog is called I want the people and the government and people to work together for Singapore’s future. .. https://www.facebook.com/pages/I-want-the-government-and-people-to-work-together-for-Singapores-future/185331834935656
At the same time, clearly Roy is a supporter of our way of life and society here in Singapore and not a revolutionary. His biggest failure was in believing that asking for the government to reform and provide some transparency was a perfectly reasonable request.
This makes his approach very different to mine. I don’t believe that asking the PAP to change is the way to go. I want the PAP voted out and the structures put in place that will ensure strict rule of law, protections, oversight, accountability, transparency so that democracy AND prosperity can flourish and so that the people prevail no matter what colour shirt sits in the house.
A true opponent would be campaigning to change the government not ask it to reform or improve in response to citizen concerns so why did Roy become Public Enemy Number One? Roy just wanted you all to make a bit more noise about where your money went, how it was used, what GIC’s and Temasek’s profits were, MPs’ inclusion on boards and the PM as head of GIC and his wife as head of Temasek.
I do firmly believe that the PM has been incredibly foolish and ill-advised in making an example out of Roy. Whatever the outcome it will come back to bite him in the next GE. We owe it to ourselves now, not to Roy, but to ourselves, to not let ourselves be distracted by the defamation circus. We owe it to ourselves not to be scared off. If in fact Roy is sued out of existence, which I hope doesn’t happen, then we owe it to ourselves to pick up his voice and carry it on where he left off.
Roy mentions the fine over S$2,000 that would prevent a Singaporean from standing for election. The ban is not life long but for 5 years. Roy, we are all thinking, is still young. Actually it is to all practical purposes a 10 year ban. I feel that Roy can learn a lot from JBJ’s example. In particular my father never gave up and never left his beloved country. I remember an Economist article said of my father, “whereas others prefer to speak from the safety and comfort of exile, Jeyaretnam stands his ground, as solid and immoveable as his name.”
I was forced into a form of exile as a young graduate much against my will. I was always extremely unhappy to be away from home and from my mum, who died whilst I was serving NS and then from my Dad and my wider family. I was not even a real exile just persona non grata who couldn’t even get a job interview in Singapore let alone work there, as part of a process of punishing the eldest son of JBJ. I at least could fly back to Singapore whenever I wanted and my dad was, even as a bankrupt, always able to travel and visit me and join us on family holidays. We had some fantastic time together. More importantly I have seen the devastating effect that being a exile from the PAP’s Singapore has had on the Singaporeans around me when I lived in London. Each one not able to return home, especially now that their parents are elderly and suffering. Poor gentle Francis Khoo- finally only able to return to his homeland in an urn . No, being an exile is not an easy option.
My late father J B Jeyaretnam was fined an amount to keep him from standing for election and just as the 5 years elapsed the PAP called a snap election before he could become eligible. They then took a full 6 years to the next election so almost 11 years but he still didn’t give up. The cycle after that he stood and no doubt he would have been a full MP if not for the Polling Booth-Magic-Teleportation-Paradox ruling. Still he became an NCMP. Roy is a young man still, flexible enough to enter a different career path, educated, with family here who can support him. He should not give up on plans for standing. One of the first things I was told back in 2009 by the venerable Mr Chiam was to expect it to take three election cycles for an impact to be felt. Singaporeans appreciate consistency, dedication and perseverance.
Now let us turn to Roy’s mention of defamation as a tool for quashing dissent. Something I am also all too familiar with. His previous blog entry is a vlog interview - here- he talks about the ISA being used as a tool for rounding up dissenting voices but Roy’s view is that after international media attention after 1987 the government was too embarrassed to use it again. Whatever the reason, defamation suits are clearly the preferred weapon of repression, more insidious and difficult to criticise.
This is exactly what I said when I wrote to the WSJ decrying the use of defamation suits to silence opposition. At great expense to you my dear readers and tax payers, a civil servant was hired to rebut me with a letter that the WSJ was forced to print or lose their distribution rights. That civil servant besides being a moron who couldn’t get his spelling right, was wrong of course. He later sent in a secretly edited version to replace his first idiotic response. Still wrong. I put both his letters on my blog with my letter. Did I get sued? No. I told the truth.
However, as soon as that imbecile civil servant who owes his salary to us, wrote his letter to WSJ, the State Media machine went mad, printing that I was wrong quoting him, etc etc. Almost instantaneously every blog, new media outlet pulled my letter without asking my opinion or even giving anyone a chance to say: actually, hold on.. Kenneth is right you know. Self censorship is not a strong enough term to describe this phenomenon. This extreme caution borne of fear .
It is every Singaporean running to hide under the table as soon as the PAP yells a little.
FYI-The legal blogger Article 14 explains why I was right and is included in sources at the back.
So we have established that defamation suits have replaced the ISA as the new tool for quashing dissent. Each time the PAP twists the screw of repression and tightens up their control they get a bit smarter. That should mean that the new tool of defamation is more finely tuned, more effective and something that we Singaporeans should be more afraid of… right?
No. Be afraid but thanks to Roy, not that afraid.
First of all the Lee family, the government ministers, MPs to be and various worthies have overused this tool. In this joined up and wired world nations such as ours, relying on multiple free trade agreements with democracies, cannot continue to use such draconian methods without embarrassing themselves.
Secondly Roy is not an ordinary Singaporean. I don’t know why he says he is. Maybe he means he is non-partisan, not with a Party. Whatever the reason Roy is in fact an extraordinary Singaporean and I hope he was just being humble. He makes some claims for landmark cases but the true landmark in Singapore’s history will be that S$100,000 dollars that he raised, seemingly effortlessly. Defamation is civil. It is not similar to political donations in that Roy can raise money from anywhere in the world.
I remember, I watched in absolute amazement as that sum went up and up and up. Previously when deciding whether to appeal the IMF case against the government or not, I threw it to the public and said if I could raise enough for my fixed costs, I would take it as a sign and proceed. I raised S$10,000 and was pretty pleased with that and stopped it there. I took the losses on myself and the Government’s legal costs as I felt that was right but at least I raised enough from the public to pay my lawyer and the filing fees.
But even with that happy experience I was astonished by the money Roy raised. Yes I am banging on about it because it is very exciting to me. You see the PAP had to stop using the ISA and switched to defamation suits. But if those sued raise money so effortlessly then the whole bloody circus become neutralised. It reminds me of the way hippies put flowers down the barrels of rifles back in the 60’s. When MM Lee is not threatening his opponents with knuckle dusters he has always made it clear that he favours hitting people where it really hurts, in their pockets. Raising money online takes the pain away and is the virtual equivalent of ten new heroes rising up for every one that is cut down.
I am sure that Roy is very anxious right now. He talks about a suit of S$8,000,000 that was awarded against Tang Liang Hong. But let’s not be flexible with the truth here or re-write history. Tang left the country, didn’t appear in court and that punitive amount was awarded by summary judgement in his absence. Tang was my father’s running mate and so that whole JBJ vendetta thing also took a role. Also one of the key reasons for Tang leaving was that his wife, terrified by death threats, begged him to. I don’t think it will come to that. Yes the venue seems to suggest S$250,000 but that would be extraordinary. How can the PM prove that amount of damage to his reputation? Has his earning capacity suffered? Of course I remember George Carman Q.C. asking Goh Chok Tong on the witness stand, when he sued my father over the police reports, whether he had suffered any damage and Goh being forced to agree that he had not. The first judge, Rajendran, only awarded Goh $20,000 but Goh appealed and was able to find a more sympathetic judge who raised the damages to $100,000. But that is still a whole lot less than $250,000.
Truly it would be incredible if Roy was to take whatever amount the judge sees fit to determine and to dedicate himself to raising it online. What a hero he would be. Then he could use terms like “Landmark” and no one would deny him. None of these internet options were available to my father who instead took great delight in embarrassing the PAP by selling books on the street (a hawker’s privilege allowed to those with no income). Roy can learn from the perseverance of those who have gone before him-the Lion of Anson, Dr Chee and others- but benefit from the modern tools of the 21st Century.
If he cannot raise the whole amount online then he can file for bankruptcy and come up with a payments schedule plan agreeable to the AG, take up a new position and come back to public life when the ban is lifted and bankruptcy paid off. There is no shame in being taken down by the PAP and being smart enough to come back at them. Bankruptcy is not such an awful fate for a young man who can raise money on the internet particularly considering that in the US most successful entrepreneurs have gone bankrupt at least once.
Roy is by every measure an extraordinary Singaporean. His blog readership is extraordinary. His ability to raise money on the internet is extraordinary. In the coming GE, CPF and the minimum sum will be at the top of every Party’s agenda and that is extraordinary.
Finally Roy mentions the trouble he is having finding a meaningful relationship . He can learn a thing or two from JBJ on that score too. Many a time I was somewhere eating a meal out with my father when an attractive woman my age would approach us. To devastating effect on my self-esteem that was invariably coming over to hit on my Dad. ( I hasten to add this is when I was single). Notoriety can work both ways for attracting a partner.
Did I mention the key issue is still unanswered? Why is the Central Provident Fund Minimum Sum being raised and why can’t we take out money out when we like after 55? Why GIC and Temasek make money (if that is what they are doing) from using our captive savings and paying us a non-market interest rate? Roy has done us all a favour. He got so close to showing us how to demand accountability and stand up for our rights. If each Singaporean can in her or his own way be a little extraordinary now in support of our right to demand accountability of our government then together we can help him finish the job and prove that the pap is just a paper tiger into the bargain.
Yesterday’s attack on the French satirical magazine Charlie Hebdo has been seen quite rightly as an assault on the fundamental values of liberal democracy and freedom of expression. The attackers claimed to be avenging the Prophet Mohammed but this attack was not about Islam. Instead it was all about intimidating us from expressing our views and our beliefs where they are something that the attackers do not like.
Watching commentators across the globe condemn the brutal murder of these eight cartoonists and seeing the huge crowds that rushed out to stand vigil not just in Paris but in London and elsewhere, I couldn’t help but think of our political cartoonist Leslie Chew banned films from local filmmakers such as Martyn See, Mirabelle Ang, and Tan Pin Pin, as well as imprisoned septuagenarian author Alan Shadrake and embattled human rights lawyer M Ravi.
No bullet was ever fired in this war on freedom, no one was disappeared in the night (although thousands have fled the scene) but the Lee family and their government have just as surely slaughtered freedom of expression in Singapore as any terrorist with an AK 47. In fact they have the whole nation cowed in fear, living on land the government owns, forcibly contributing tax dollars to secretive funds the Lee family manages and the Western Press is dead, bowed or complicit.
Anyone who thinks it is a faceless bureaucracy or a board of censors making these decisions should read here:http://theindependent.sg/blog/2013/10/07/how-lky-changed-my-life/
While murder is an extreme way of achieving these goals the terrorists differ only in degree and the power at their disposal from the world’s authoritarian governments that give themselves the right to control what we can read or say. Authoritarian governments globally have not shied away from murdering journalists and those who ask inconvenient questions, whether it is Sri Lanka, Thailand, the Philippines, Indonesia, Mexico, Russia, Egypt or countless other countries throughout the world. In other countries journalists, cartoonists, bloggers and ordinary people are imprisoned or sued by regimes that dislike what they say or in the name of religious dogma. Examples include the use of lese-majeste laws in Thailand, blasphemy laws in Pakistan or criminal defamation and sedition laws in South Korea or Malaysia.
We can expect the PAP ministers to condemn the attacks today as barbaric and an assault on civilized values. But the PAP Government and the Lee family have achieved a degree of control over what can be said in Singapore that would be the envy of many authoritarian regimes and of the terrorists who committed the atrocities today.
Since they came into power the PAP and the Lee family have sought by all the means at their disposal (and they control all the means) to control the press and ensure that people are intimidated or prevented from criticising them.
I remember a cartoon from the 1970s published in the Singapore Herald, a short-lived and solitary experiment in independent media that soon incurred the wrath of Lee Kuan Yew and was shut down. The cartoon showed Lee Kuan Yew in a tank crushing a baby. The baby was labelled something like “A Free Press”. After that the PAP made sure that no one could read any views other than those they allowed in their State-owned or –controlled media. The Newspaper and Printing Presses Act followed soon afterwards ensuring that the Government has a veto over the ownership and appointment of the editorial staff of every newspaper. Though this was not even necessary in the case of broadcast media and many print titles, which were all controlled by Temasek.
Seriously who needs to send their zealots to Syria to train with ISIS when they can learn everything they need to know here.
The foreign press has been intimidated into silence by defamation suits and threats to restrict their circulation in Singapore. The Wall Street Journal, the Far Eastern Economic Review and the Economist are just a few of the publications that were sued for saying things that are said every day about politicians and institutions in the West.
When Western governments speak out now about the need to send a strong signal to Islamic extremists that the West will not be intimidated into silence I can only recall the spineless way they failed to support their media in their battles with the authoritarian regime in Singapore and have these restrictions declared a breach of Singapore’s obligations under bilateral and multilateral trade agreements. With the lack of support pretty soon most publications found it expedient to regurgitate the PAP’s version of history. These include the myth that Singapore was a mangrove swamp before Lee Kuan Yew transformed it or that Singaporeans have willingly sacrificed their freedom for the promise of prosperity.
The use of defamation laws, detention without trial and politically motivated prosecutions on bogus charges have been successfully used in parallel to create a climate of fear and stop Singaporeans from speaking up. A trumped-up charge was used to remove my father from Parliament because Lee Kuan Yew was unable to answer his questions. Subsequently he was sued into bankruptcy to prevent him from standing again or even speaking at election rallies. He became a virtual non-person just like dissidents under the Soviet regime which was condemned so forcefully by the West.
The climate of fear and self-censorship is still as strong as ever despite the PAP pretence that there has been liberalization.
Dr Chee was silenced. The ReformParty suffered a media black out during GE 2011 ( but still they won a greater share of the national vote than SPP for example). I am banned from attending debates and talks at our national universities and one university even attempted to prevent me from being in the audience. Of course Hri Kumar tried to keep me out of a consultation on CPF, dodged my questions and then resorted to lying and smearing me. Mr Chiam was himself the victim of vicious smears as all opponents of the Lees have been. Leslie Chew, the cartoonist, was arrested and held in jail without bail for an extended period. Academic Cherian George is this week finding out for himself that there is no such thing as being a mild opponent of the regime as he experiences the same backlash we have all suffered.
My own family (and I) were subjected to maybe some of the most extreme versions of this- threats of rape, violence and even death in an attempt to silence me and crush plurality of thought. This off the scale attack on a politician’s family members was aided and abetted by both Government and alternative media and the silent complicity of the other political parties.
What is most depressing is that, in contrast to the spontaneous rallies that have erupted in France and elsewhere in response to the murders of the journalists, Singaporeans have been mostly silent just as they were over what happened to JBJ or the alleged Marxist conspirators.
It is a blot on Western values that authoritarian regimes like Singapore are not only tolerated but held up as shining examples for democracies to emulate. Only Jim Sleeper got this right when he so vehemently and intelligently objected to the liberal values of Yale being compromised through setting up an offshoot in authoritarian Singapore.
It is pure hypocrisy if the reaction to this barbaric attack is just about combatting the threat from Islamic extremism and does not grasp the wider lesson about standing up everywhere for universal values like democracy and freedom of expression.
Just now on CNN Bruce Shapiro editor of the Dart Center for Journalism and Trauma at Columbia University in New York spoke about the attack which he categorised as an attack on journalism:
” People are united in saying this is an attack on journalism. We as journalists now are saying ‘we are all Charlie Hebdo’. This is part of a global pattern of using journalists as a capillary system for fear and terror. Whether it is terrorists in Paris, whether it is ISIS in Syria, whether it is Narco gangs or politicians who have assassinated journalists in Mexico, in every case it is about seeing the only value of journalism as a corpse to spread fear… and that I think is at the heart of this. Are we going to stand up in general in the memory of great cartoonists but not stand up for the value of independent journalism and value of satire in democracy. That’s what’s at stake here, democracy.”
As Martin Luther King said, ” In the end we will remember not the words of our enemies but the silence of our friends. There is little doubt that democracy, plurality of thought and freedom of expression would have great difficulty finding a friend in Singapore.
My Opening Remarks on Defamation and Tyeisha’s Reading of RP’s Statement on CPF at the Return Our CPF Rally
In a Facebook post on Wednesday night, the PM made another statement of breathtaking economic illiteracy. He said, “Singapore must never fall into the same hole as some countries which spend more than they can earn,” Perhaps it is the fact that he studied Mathematics rather than Economics that has led him to make such a fallacious statement. As every first-year student of Economics learns, while one country may be able to increase its savings as long as other countries are willing to go into deficit, if all countries simultaneously tried to increase their savings and run current account surpluses, the result would be a catastrophic slump. This is what caused the Great Depression and fiscal austerity has unnecessarily prolonged the Great Recession since 2009.
However I suspect his motivation is political rather than economic. As the head of Singapore’s elite he has a vested interest in stopping spending on the bottom 80% of the population if it might conceivably lead to a rise in taxes for him and his cronies down the road.
But such fears are unfounded. Singapore is in no danger of spending more than it earns for the forseeable future. We run a current account surplus (which represents our external saving or forgone consumption) of around 20% of GDP year after year. This is already attracting attention internationally from the US and the IMF because of the drag it exerts on world growth.
Singapore has no external debt and while the PAP rip off CPF holders by forcing them to lend money to the government at below-market rates of return, all CPF debt is owned by Singaporeans. So if we were to spend more than we earn we would be borrowing from ourselves. However we are very far away from this ever happening. In fact the rate at which government reserves are accumulating, at least on paper, is accelerating.
As I wrote about in Budget 2014: A Very Generous Amount of Wool Pulled over Your Eyes, the PAP government is hiding a surplus of around $30 billion a year from its citizens. Over the last six years to 2012 the cumulative surplus amounted to $187 billion, even with the poor returns the government has been able to achieve with our captive CPF money. Even the Pioneer Generation Package, which the PM said MPs from both sides of the House had paid tribute to for its generosity, only represents $260 million of current spending and not the $8 billion headline number, which is unlikely ever to be spent. Why then, for goodness’ sake, is the PM talking about taxes having to rise? To quote the PM, “We are alright for the next few years. Beyond that, we must think about raising more revenues.”
One might suspect he has taken leave of his senses. On present trends, using the figures the government reports to IMF, the cumulative surplus to 2020 is likely to be in the region of $250 billion. So either he is mad, mendacious or we should be afraid, very afraid, that our vaunted reserves are not all they are cracked up to be. Government secrecy can be used to hide a multitude of sins.
I wrote about this in “Where have our reserves gone”, “Sherlock Holmes and the Case of the Missing (or Merely Hidden) Reserves“, and “An Unappetizing Picture.” It is one of the classic signs of an autocracy that the government treats the people as children, who cannot be trusted to make decisions for themselves. The Finance Minister’s Budget presentation is certainly like a nursery story for children. It serves to cover their political motives in not wanting Singaporeans to realise how badly they are being short-changed.
However I will reserve further discussion of the contradictions in the PM’s statement to another time. Here I just wanted to make one simple point. If the PM and the PAP were serious about not burdening future generations then why not give HDB owners the freehold of their apartments once they have paid off their thirty-five year loans? As everyone knows, HDB leases are only for ninety-nine years, which means that future generations will have to start the process of paying for a home all over again because the property will revert to the government at the end of the lease.
In his National Day Rally Speech in 2011, the PM said “The way we have done it which I think has been successful has been to give people assets, especially an HDB flat;”. As usual the PM is being economical with the truth, as in an actuality the HDB purchase price should be amortized over the life of the lease. At the end of the lease the asset will be worth zero and our descendants will inherit nothing.
If Singaporeans collectively own the freehold of our HDB properties then we can manage the estates ourselves and make our own decisions about upgrading and redevelopment. The full rise in the value of the land will accrete to us rather than a large part being siphoned off by the government. If the majority of us can never aspire to owning (a share of) freehold property, then we can never become a true democracy, because we will always be dependent on the government. Just as at Cheng San in 1997, the PAP government will continue to try and use Singaporeans’ insecurity over property ownership to ensure that they stay in power. This cannot be to the long-term good of our country
The judgement in my appeal against the IMF Loan Commitment confirmed what has long been apparent: that the government is to all intents and purposes above the law. Furthermore, the judiciary are not there to act as a check on the executive (a “red light” in CJ Chan’s parlance) but instead to “green-light” illegality by preventing citizens bringing actions to have the illegal behaviour stopped. In a uniquely Singaporean version of jurisprudence, the judiciary is essentially subordinate to the executive. In my response I will deal first with the merits of the argument and then with the issue of locus standi.
“The Appellant has failed to establish a prima facie case of reasonable suspicion”
The learned judges dismissed my appeal on the arguments on the grounds that:
- It was clear from the initial draft of Article 144 when the bill was first put before Parliament that the giving of loans was to be excluded from the need for Parliamentary and Presidential scrutiny
- While admitting that they were ill-placed to comment on the validity of the financial arguments that I put forward to show that a loan commitment was a contingent liability and in nature akin to a guarantee the judges went ahead anyway and dismissed my arguments. In doing so they made some shocking mistakes and misinterpreted an excerpt from a US Federal Deposit Insurance Corporation manual whose meaning should have been abundantly clear. They also argued that, despite the overwhelming evidence I had produced to show that regulators and banks treated loan commitments as contingent liabilities in the leading financial centres of the UK and the US, the accounting treatment might be different in Singapore. If that is the case, the IMF should kindly explain why they selected our Finance Minister to be Chair of the International Financial and Monetary Committee if Singapore differs so markedly from accepted practice in major countries.
- Though this was only touched on peripherally the judges also reiterated the nonsensical argument that MAS was an entity separate from the government.
I will deal with the arguments in (a) above first. I argued at the appeal hearing that it was only necessary to look for the original intention behind the legislation if the natural and ordinary meaning of the words was not clear. To any layman, the words “no guarantee or loan should be given or raised” would mean that both nouns could be paired with either verb. The fact that the proposed wording of Article 144 when the Bill was introduced into Parliament suggested that each noun was to be paired with a corresponding verb (the reddendo singular singulis argument) does not mean that we should use that interpretation. The words “debt” and “incurred” had been left out of the Article as enacted by Parliament so the original wording is an unreliable guide. It is equally likely that Parliament wished to have tighter financial controls rather than looser and thus intended both the giving of guarantees and loans to require Parliamentary and Presidential approval.
The Appeal Court judges do not address this issue only saying that they sided with the original judge in his interpretation. They also say that it is not ordinary parlance to speak of “raising” a guarantee and that therefore “raised” in Article 144 must be applied to “loan” only and “given” to “guarantee” only. I fail to follow the judges’ logic here. Just because one noun may not make sense when paired with one of the verbs, it does not follow that therefore we can exclude the other noun from being paired with both verbs if it makes perfect grammatical sense to do so.
In any case I showed that it is common parlance to speak of raising a letter of credit. A guarantee is to all intents and purposes very similar to a letter of credit. Both instruments require the issuer to pay out if the party that is covered by the guarantee or letter of credit fails to do so. The judges say that they are different instruments and serve different purposes. However as their accounting treatment and risk profile for the issuer would be identical it is difficult to see why the example for letters of credit should not apply to guarantees.
However whilst it may be possible to argue about the meaning of the words the judges completely failed to deal with my main point as set out in (b) above. This is that this is a loan commitment and not a loan. If they were ill-placed to comment on the validity of my arguments, not having seen any written submissions from either me or the AG, then why not call for written submissions from both sides after the hearing was over. Alternatively they could have adjourned the hearing to allow both sides to make written submissions. Counsel for the AG called for my submissions to be stricken from the record on the grounds that they involved complex financial and accounting matters for which she had not prepared. This was disingenuous since counsel also refused my offer of a short postponement to allow her to prepare. It is unfortunate that the judges, despite taking nearly seven months to deliver their verdict, did not allow me more consideration given the gross disparity in the resources available to me as a litigant in person as compared with the government.
I produced evidence from a wide variety of sources, including the US Federal Deposit Insurance Corporation’s Manual, the Bank of England’s Yellow Folder and the last published accounts of J P Morgan, the leading US bank, to show that banks were required to record loan commitments as contingent liabilities on their balance sheet. As the judges mention, I pointed out that the UK Chancellor of the Exchequer himself referred to the UK’s loan commitment to the IMF as a “contingent liability.”
This is reinforced by the fact that the interest rate on loans made to the IMF is virtually zero. It is therefore inexplicable how Singapore’s IMF loan commitment could be considered an asset. Since the government pays CPF holders 4% to borrow their money the IMF loan, if drawn upon, must be a money-losing proposition from the moment it is drawn down.
In support of the argument that the loan commitment was a liability not an asset I cited US Statement of Financial Accounting Standards 133. This requires that loan commitments be treated as options on bank balance sheets and marked to market. A loan commitment is in the nature of a call option granted to a potential borrower that gives them the freedom to draw on the money at a time of their choosing. An option cannot be worth less than zero and should normally have a positive value while the writer of the option would have to record a corresponding liability. The option could not be worth less than the present value of the difference between what it would cost the IMF to borrow in the open market and the interest rate that it would pay on the loan if drawn down (effectively zero).
Yet the judges chose to misunderstand my point and claim that they were surprised that as an economist I did not understand the difference between a loan commitment and an option. There may be a legal difference but clearly in economic terms a loan commitment is an option because the borrower has the right to draw down the loan but is not obliged to do so. It is the learned judges who demonstrate their basic ignorance of modern finance theory.
The judges made other basic errors. The judges said that I had quoted Christine Lagarde as calling the new lending commitments by IMF members a “fireball”. In fact what I had said was that The IMF (actually our Finance Minister Tharman) had called the new loan commitment a “firewall”. In Tharman’s own words:
“We all agreed that it was absolutely essential to have the firewall built up at this time. It’s not a day too early to be building up the firewall,”
I pointed out that the commonly understood definition of a firewall was to construct a scorched earth perimeter around a fire to stop it spreading. This was precisely what the new loan commitments were supposed to do, i.e. they were resources to be sacrificed to save the world financial system. To quote Christine Lagarde (see here):
“These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members,” Lagarde stated. “They will be drawn only if they are needed, and if drawn, will be refunded with interest.”
The judges said that the sheer risk inherent in an asset could not turn it into a liability. However they misconstrued my argument. I was arguing that the commitment to make a loan to the IMF was a liability. If properly accounted for, it would have a negative value on the government’s (including MAS’s) balance sheet not only because there was likely to be a negative spread between the cost of funding that loan and the zero interest that would be earned on it but also because of the risk that by the time the IMF drew down the loan both the creditworthiness of the IMF as well as global credit conditions could have substantially worsened.
The judges went on to misinterpret the first sentence of the passage from the FDIC manual that I quoted, which states “In reviewing individual credit lines, all of a customer’s borrowing arrangements with the bank (e.g. direct loans, letters of credit and loan commitments) should be considered” as referring to the customer’s contingent liability. Yet clearly the examiners are referring to the contingent liability of the bank and not the customer. This can be seen further on in the passage which states “Additionally, many of the factors analysed in evaluating a direct loan…are also applicable to the evaluation of such contingent liabilities as letters of credit and loan commitments. When analysing these off-balance sheet lending activities, examiners should evaluate the probability of draws under the arrangements and whether an allowance adequately reflects the risks inherent in off-balance sheet lending activities”. Clearly from the context the manual is talking about the contingent liability of the bank making these loan commitments and whether the allowance that should be made adequately covers the risks. The allowance would appear on the liability side of the bank’s balance sheet and reflect the possibility of loss if the loan is drawn down.
That the judges get wrong something so basic here undermines their claim that their selective interpretation of Article 144 is correct.
To conclude, while the judges accuse me of trying to draw a tenuous connection between a loan commitment and a guarantee, it is the judges who have tried any stratagem, no matter how tenuous and lacking in logic, to avoid having to deal with my arguments. To claim that Singapore follows a different set of accounting standards from the rest of the world will make Singapore a laughing stock globally. Furthermore the fact that the Finance Minister has only survived this court challenge by relying on such a perverse refutation of generally accepted accounting principles makes it clear that Euromoney made an egregious mistake in naming him Finance Minister of the Year 2013. Tharman should be grateful that the judgement was not announced till November 2013, just after the Euromoney award.
In addition the government has had since 1997, when the government’s ability to make loans without getting Parliamentary and Presidential approval was first questioned, to amend Article 144 so that the meaning supports their interpretation. They have failed to so. This is because having ambiguously worded legislation or very widely drawn powers without any checks and balances, as is the case with the Broadcasting Act, suits their purposes and gives them the widest possible leeway in interpretation. However such ambiguity and wide discretion given to Ministers without the possibility of appeal to an independent party is incompatible with the rule of law.
“The Appellant does not have the locus standi to challenge Art 144″
I am not a lawyer so I will make my remarks here brief. The ruling on locus standi effectively puts the government beyond the law except for the most “egregious” breaches. This nevertheless marks a slight advance on the original judge’s ruling that Singaporeans had no right to sue the government unless their private rights had been breached.
Let us leave aside for the moment the question of whether I had suffered damage as a result of my public rights being violated. I argued that as a CPF holder and taxpayer I have suffered damage as a result of the government making a loss-making loan commitment to the IMF.
However the fact that this case involved an alleged unlawful loan commitment of $5 billion and a breach of the Constitution begs the question of what would the judges would define as a breach of the law of sufficient gravity to allow a citizen to sue. The basis of rule of law is that it does not leave discretion in the hands of bureaucrats. By leaving it to the judges to decide on a case-by-case basis what is a flagrant breach of the law surely seems to be admitting that the judiciary are susceptible to political pressure. Will a flagrant breach be different for a PAP government from a future Opposition one? And citing former CJ Chan Sek Kheong’s “green-light” theory of administrative law reduces the judiciary to being merely an arm of the executive, there to facilitate executive decisions rather than act as a check on the executive.
It is a pity that our judges believe that following the way English administrative law has developed since 1977 and applying the “sufficient interest” test would “seriously curtail the efficiency of the executive in practising good governance”. They even go beyond CJ Chan who leaves an avenue for the courts to intervene when the state breaks the law by saying that “the courts can play their role in promoting the public interest by applying a more discriminating test of locus standi to balance the rights of the individual and the rights of the state in the implementation of sound policies in a lawful manner”. Now the appeal judges are saying has to be “extremely exceptional instances of very grave and serious breaches of legality” to warrant allowing an action by an individual in the public interest. Yet the example they cite, of a Cabinet Minister’s abuse of his powers as opposed to the actions of a low-level government officer, is surely engaged here. Even in the case where a low-level government officer breached the Constitution, the Auditor-General considered the issue of sufficient seriousness to make the Ministry of Finance go back and get the President’s approval for the issue of promissory notes in the relatively insignificant amount of US$16 million to the International Development Agency!
The judges also devoted a lot of paragraphs to precedents from the UK about how the courts there have not allowed judicial reviews of the discretion applied by government agencies such as the Inland Revenue in how they deal with classes of taxpayers. However that is irrelevant to the current action, which is concerned with a breach of the Constitution by the Finance Minister. It seems that the judges were clutching at straws in an effort to make their stance on locus standi seem not too far out of step with the UK.
The judges’ argument that Parliament or the President would have intervened if there was a serious breach of legality rather begs the question of how Parliament is meant to intervene in cases in which the Minister is alleged to have broken the constitution by bypassing Parliament. And where the ruling Party has over 90% of the seats despite only winning 60% of the votes and until 2011 won a walkover at every election it is difficult to understand how Parliament can be an effective check on the executive.
As for the President, he failed to intervene in the case of the IDA promissory notes until the Auditor-General pointed out that MOF had breached the Constitution. The judges say that the President could have used Article 100 of the Constitution to convene an advisory tribunal of three judges to consider this question and the fact that he did not choose to do so supports their contention that I should be denied standing. However JBJ requested that the then President convene a tribunal in 1997 to decide the same question and he declined to do so. If the government chooses to bypass getting Presidential approval then the President is unlikely to make a fuss. We are all aware of what happened to Ong Teng Cheong and his decision not to run for a second term after his requests for greater transparency were rebuffed.
My aim in bringing this case was to ensure that we had tighter financial controls over what the government does with our money and to prevent it squandering the huge surpluses it has extracted from the people through bad investments, influence-buying exercises and excessive compensation for the managers. This is a government that would rather give away your money to foreigners than see it spent on your welfare. Ironically the President’s only financial controls are to prevent spending from the reserves on Singaporeans. On the basis of this ruling there is nothing he can do to prevent the money being given away in the form of loans. In a climate where the PAP government is already under scrutiny for banking secrecy, a ruling that we have no ways of controlling a rogue government that breaches the Constitution shows that we have no standards of governance and no rule of law. It is inexplicable how Singapore can be rated one of the most transparent and least corrupt countries when there are such glaring loopholes in financial controls. The judges say that allowances should be made for the cases of the most serious illegality. However in practice, given the award of costs to the AG, this judgement will have a chilling effect on the willingness of citizens to act as watchdogs of the public interest and gives a “green light” to government illegality.
Issued by Kenneth Jeyaretnam on 22 November 2012
FOR IMMEDIATE RELEASE
On 22 October 2012 Justice Tan Meng Lee decided to dismiss my application to have Singapore’s $5 billion loan commitment to the IMF quashed on the grounds that it violated Article 144 of the Constitution. The learned judge chose to rule that Article 144 did not apply to a loan commitment. On this I believe we have good grounds for an appeal. A loan commitment cannot be regarded as anything else other than a liability akin to a guarantee.
Unfortunately in fighting to stop an action based on an ambiguous aspect of our Constitution a completely different aspect of our Constitution was thrown into peril. The learned judge ruled that I had no Locus Standi to sue the government on an issue that affected all Singaporeans equally. In this a vital constitutional right was removed from the citizens of Singapore almost as an aside, causing a well known legally qualified commentator to refer to the judgement as, “ The day our Constitution died” .
What we have achieved so far.
Even without an appeal this case has established on public record several important points:
- We have proven that the Office of the Elected President is toothless and that his Excellency’s office can be completely unaware of constitutional breaches by MOF as in the case of the promissory note to the World Bank. That the Office of the President is without a clear frame of reference is demonstrated by the fact that my letters to the President were erroneously referred to the MAS.
- The MOF initially relied heavily on its assertion that MAS is an independent entity that can do as it wants with our money. We argued that MAS as a schedule 5 corporation was under the jurisdiction of the MOF and in this we were right. It is unlikely that the MOF will ever again try to claim that MAS is an independent entity.
- We have shown that the Constitution is so ambiguous as to be open to different types of interpretation yet one of the fundamental elements of Rule of Law is that the Law must be unambiguous so the discretion of public officials is removed. The AG must surely now recommend that Article 144 be re worded so as to fulfil one of the fundamental conditions for rule of law.
- We have forced a potentially embarrassing ruling demonstrating an ignorance of the accounting definition of liabilities and assets, to go on public record where it can be scrutinised globally.
- We have shown that the AG on behalf of the MOF would rather fight a case through semantics and narrow technical definitions than do the right thing by the people and err on the side of democracy by taking the loan commitment back to Parliament and the President for approval.
Taking into account the enormous risks and costs involved and having achieved so much already I have considered whether there is any merit in launching an appeal. Conversely if the Court is correct it matters not how blatant, how transparent or how deliberate the breach of such a constitutional provision is; the simple and inescapable consequence is that no citizen may challenge it. The learned Justice Tan’s judgement on Locus standi must be of grave concern to all citizens of Singapore and of the common wealth.
Such a conclusion does not sit easily with a country that, at least in the eyes of the West, aspires to be thought of as a democracy and I believe that on this point at least there are good prospects that the Court of Appeal would not uphold the judgment of the single judge.
Seven days ago I announced via social media and my blog that the cost implications of losing an appeal were enormous and that the AG was asking for security of S$20,000. The public immediately began pouring thousands of dollars into a fund for an appeal, Ordinary citizens of Singapore, already squeezed by two decades of austerity, have given this money in sums as small as $2:00. There never could be a greater demonstration of public interest and concern about our constitutional rights.
After much thought and taking into consideration the advice of legal experts and considering the enormous amount of public interest and support I have reached the following decision. The ruling regarding locus standi is of such paramount public interest that it demands an appeal. Also, if the learned judge’s interpretation of Article 144 is allowed to stand, then any future government can take heart from knowing that they can give away our entire reserves without fear of being challenged and that the President has been shown to be unable to stop them.
Notwithstanding the huge risks and the struggle ahead I feel it now behoves to me not to let our citizens down. These good people of Singapore have ensured that we have enough money in the appeal fund to lodge security and file with the courts today.
Let us now hope that Mahatma Gandhi was right when he said,
“First they ignore you, then they ridicule you, then they fight you, and then you win.”
“MONDAY, NOVEMBER 19, 2012
I have made a donation to the fund for Kenneth Jeyaretnam to take up the issue of the IMF Pledge. He is doing it on behalf of all Singaporeans and deserve our support. Please donate generously.” See http://tankinlian.blogspot.sg/2012/11/imf-pledge.html for details.
Mr Tan Kin Lian has previously written twice about the constitutionality of the loan that Singapore made to the IMF. He is kinder than me in his writing style but he comes to the same conclusions. And this is a man whom the select panel deemed fit to run for President of our Republic! He thinks the loan was unconstitutional and he wants to help me appeal it on behalf of all Singaporeans.
On July 07th 2012, Tan Kin Lian had raised the issue of constitutionality of the loan here:
Of course he did. As an EP candidate how could he keep quiet? He said, “I am surprised that MAS would give the above type of explanation – as it seemed to defy logic and common sense.”
On July 12th 2012 he wrote an open letter to the Straits Times forum. Here is some of what he said:
” I am. therefore, amazed by the arguments put forward by the Monetary Authority of Singapore that the pledge given to the IMF, as it now stands, did not breach the Constitution. If the position of MAS is correct, it is better for the Constitution to be re-written to reflect the position taken by MAS.
The Constitution is perhaps the most important legal document in the land. The citizens should be assured that they can trust the Constitution to mean what it says, and that the wordings are not interpreted in a manner that defy logic or common sense.
I do not understand why the pledge of this large amount is not submitted for approval by required under the Constitution. Even if there is an urgency for the pledge to be given, it can be given on a provisional basis, and be subject to obtaining the required approvals. I believe that most countries would follow such a process on a matter of great importance. This would reflect a high standard of governance, which is what the Government aims to promote in the corporate world.
Rather than justify an action that is already done, I suggest that the MAS should submit the pledge to Parliament for rectification by Parliament and the President. It is all right to make a mistake and to learn from it.
Tan Kin Lian”
You can read more here: http://tankinlian.blogspot.co.uk/2012/07/pledge-to-imf.html
Clearly a man who knows his liabilities from his assets and a man who knows how to have the courage of his convictions. Thank you Mr Tan Kin Lian, on behalf of all Singaporeans who want to keep their constitution alive.
I have highlighted articles from blog spot Article 14 previously on Rethinking the Rice Bowl. “Subra” states on his blog to be a Singaporean lecturer in law here and he clearly has the talented teacher’s skill of setting out complex subject matter in a simple, easy to understand manner. Several very good reasons why everyone should read his latest article: http://article14.blogspot.co.uk/2012/09/everybodys-talking-about-talking.html But he has added a twist that I didn’t notice.
IN THE SUPREME COURT OF THE REPUBLIC OF SINGAPORE
IN THE HIGH COURT
BEFORE THE SENIOR ASSISTANT REGISTRAR YEONG ZEE KIN
TUESDAY, 21 AUG 2012, AT 9:00 AM, CHAMBER 2-6
9. OS657/2012 KENNETH ANDREW
(L F VIOLET NETTO)
S CHAMBERS (CIVIL
FOR LEAVE TO APPLY
FOR A QUASHING
So, the pre-trial conference for my case to request a quashing order on the IMF loan listed for Tuesday morning, is now in the public arena. The AG has taken what I am told is an unusual step in ‘choping’ the 9:00 am slot. Apparently the more usual form or procedure is to turn up and get in line for a time slot. My guess is that they don’t want any Press hanging around and want to get in and out as quickly as possible. Then again they may just be hoping that the early bird avoids the Wong. That is the Law Society’s Mr. Wong who has a habit of turning up whenever M. Ravi is due in Court or even Chambers. Actually, to be fair to the poor misguided soul, he has given a verbal assurance that he will stop stalking us in future.
With National Day fresh in our minds it is timely to have a quick recap. The PAP may be able to recite the National Pledge but they are oblivious to the meaning of the words and clearly not a one of them understands what ” Democracy” means.