Author’s note: This is an edited version of article I originally wrote for TOC which has not been published on my blog before today. Reading this article I surprised even myself, to see that back in 2009 I had already exposed the link between GIC’s funding and Temasek. You’ll read in the article where I say, “However a significant portion of its funding may come indirectly from the CPF which invests primarily in debt issued by MOF.”
If I wrote this today I wouldn’t put in the word “may“. That is because since 2009 GIC has confirmed what I wrote that in fact GIC’s funding comes from CPF. They say so here, “GIC, along with MAS, manages the proceeds from the Special Singapore Government Securities (SSGS) that are issued and guaranteed by the government which CPF board has invested in with the CPF monies”. I have also updated the level of assets of GIC. These are really the only parts of the article that need updating.
Everything else is as true today, so maybe back in 2009 Singaporeans just weren’t ready for the message. Fast forward to the last two years or so and thanks to the dedicated blogging and brave public rallies of Han Hui Hui and Roy Ngerng who started blogging on this in 2012, my central ideas as to transparency and how our wealth is invested have become popularised and a hot button issue. No doubt CPF will be at the forefront of every Opposition Party’s manifesto next GE.
My view on investments is that an extra 1% or 2 % return is a red herring. Investment in our only natural resource, our people, could potentially have a much higher internal rate of return, in the form of a more highly educated workforce, than that achieved by Temasek or GIC on their overseas investments.
What is a Sovereign Wealth Fund?
Sovereign Wealth Funds (SWFs) are not a new idea. According to Wikipedia, the term Sovereign Wealth Fund was first used by Andrew Rozanov in an article entitled, ‘Who holds the wealth of nations?’ in the Central Banking Journal of May 2005. A SWF may be defined as a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments.
Two types of SWFs.
1. The first, and the oldest form of SWF, is one set up to manage revenues from an exhaustible resource such as oil, or one which derives its assets from government budget surpluses.
One example of this type and possibly the oldest known is the Kuwait Investment Authority, a commodity SWF created in 1953 from oil revenues.
A more recent example of this type is the Norwegian SWF which was set up primarily to ensure that the wealth represented by Norway’s oil reserves was not squandered on current consumption but turned into financial assets which would benefit future generations.
The example we are interested in is Temasek. It was set up in 1974 to hold stakes in the various government-controlled companies, such as DBS, SIA and Singapore Technologies, that had previously been held by the Ministry of Finance. The Temasek Holdings website states that, “Our investments are funded through dividends we receive from our portfolio companies, our divestment proceeds, commercial borrowings, a maiden Yankee bond issue in 2005 and occasional asset injections from our shareholder, the Minister for Finance (Incorporated).”
2. The second type of SWF is one set up to manage a country’s excess foreign exchange reserves. GIC is probably an example of this type of SWF since it was set up in 1981 with the explicit objective of managing our foreign exchange reserves for long-term capital appreciation. I say probably, as there is very little transparency, so it is not clear whether it is also funded by capital injections from the Ministry of Finance in the same manner as Temasek. However a significant portion of its funding may come indirectly from the CPF which invests primarily in debt issued by MOF. ( see my note that this information is now updated) No information is available on the current level of assets. The website states only that the investment portfolio is in excess of US$100 billion. However various estimates have put the level of assets at between US$250 and US$330 billion. (Author’s note: I know now from the Statement of Assets and Liabilities that the Finance Minister has to include with the Budget (though I have not been able to access it this year) that the global total of financial assets owned by the Government is about $800 billion. Subtracting Temasek’s assets ($223 billion in 2014) and the Government’s deposits with MAS ($113 billion in 2014) from this leaves a figure for GIC’s assets of about $460 billion. However in the absence of even minimum levels of transparency this is still guesswork and could be completely wrong.)
Does Singapore even need a Sovereign Wealth Fund?
Singaporeans need to ask, particularly in the light of the recent investment losses, why Singapore even has a SWF let alone two.
Look at my definition for the first type and you will see that Singapore does not meet the criteria since we do not need to manage a windfall from any natural resources. If Singapore had expanded its domestic investment and consumption over the last 30 years it would have had smaller current account surpluses and thus smaller foreign exchange reserves needing management. MAS already has sufficient foreign exchange reserves necessary to manage the Singapore dollar. No second SWF was needed to fulfil this function.
Again without transparency we have no breakdown of how much government saving in the form of surpluses has contributed to both Temasek and GIC’s growth over the years. But we do know that the cumulative budget surplus over the last thirty years has been considerable.
Where have these budget surpluses come from in the first place. Well we all know how to save money. We cut back on expenditures. When a country cuts back on the absolute basics such as free education for its children then it creates a budget surplus. Let’s make no mistake here. No other First World Nation only has compulsory education up to the end of Primary school and even that only for a very short day. Even our very minimal compulsory education is not even free (although heavily subsidised). I am not advocating a full welfare state but to put it bluntly, Singaporeans have helped to pay for our enormous overseas investments by going without the brights and benefits that citizens in a democracy demand. So Singaporeans go without free universal education to secondary level, a national health insurance system and other elements of a social safety net which are characteristic of most countries at Singapore’s level of development. By making you go without the PAP builds up a huge surplus for investment overseas.
How the budget surplus should be invested: In Singaporeans
SO, the budget surplus, has been taken from the pockets of Singaporeans and represents money that you not only could have but should have. It could and should, be returned to the citizens of Singapore in the form of lower taxes, fees and charges. It could have also been used to finance much higher domestic investment in education or in health and welfare.
Their website states that Temasek has achieved an annualized return of 18% since inception though that is based on the March 2008 asset figure of S$185 billion rather than on the current valuation of S$145 billion announced by CEO Ho Ching yesterday. Investment in our only natural resource, our people, could potentially have had a much higher internal rate of return, in the form of a more highly educated workforce, than that achieved by Temasek or GIC on their overseas investments.
Instead of the Government investing our money to pick winners through an industrial strategy there could have been greater incentives for investment and R&D in the private sector which might have led to faster productivity growth and higher levels of real incomes. And even if GIC has not been funded directly by the MOF, the growth of our foreign exchange reserves has come about through chronic external surpluses which represent domestic under-consumption and under-investment.
As a final insult, CEO Ho Ching announced on July 29th 2009 at the Institute of Policy Studies that Temasek was thinking of allowing Singaporeans to co-invest alongside Temasek sometime in the next ten years. How kind of her. I thought we had already invested as outlined above. The only positive side of this news is that it would presumably force Temasek to be much more transparent about its investment process and corporate governance. In any case any personal financial adviser would not advise an investment in a company without sufficient transparency that required due diligence.
The next step: issue shares to Singaporeans
As we all know, calls on the government for accountability and transparency in its sovereign wealth funds is not new. However; I would go one step further! Many of you know that I gave a speech at the Foreign Correspondents Association lunch on the 2 July 2009. In answer to a question put to me after the lunch I went on record as saying that Singaporeans should be given a direct stake in our SWFs. One way to do this is through the privatization and listing of Temasek and the issuance of shares to Singapore citizens. Another way is through the explicit linkage of part of the value of these assets to the welfare of Singaporeans, as is done in Norway through the Pension Fund.
To counter one possible objection that our national “crown jewels” could end up being bought by foreigners the government could retain a golden share which would prevent this happening to Temasek’s portfolio of domestic GLCs. Longer term there is no reason for Singapore to continue to run large budget surpluses over the course of an economic cycle.
In conclusion whilst I will not stop any time soon on calling on our government for greater transparency and accountability into how it manages our money, I would urge us to look at credible new proposals such as mine.
Over the last few days PAP Ministers and MPs have lined up in Parliament to attack the WP for its lack of transparency and accountability in running AHPETC. As I said on my Facebook page, it’s about $6.6 million of Aljunied residents’ money versus $800+ billion of Singaporeans assets in GIC, Temasek, MAS and who knows how many other entities. That’s less than 0.001%.
Where does the bigger problem lie with accountability and transparency?
I will remind you of what Khaw Boon Wan (KBW) said during Wednesday’s debate:
“The Town Council also did not “adequately manage the conflicts of interests of related parties arising from ownership interests of its key officers,” said Mr Khaw. “It was very convenient. Husband issued payment voucher, wife issued payment.”
Yes, Khaw really did bring up husbands and wives in a debate on conflicts of interest. The phrase: The pot calling the kettle black, does not even begin to cover this.
I wonder whether the PAP appreciates the hypocrisy in attacking the WP over transparency and accountability. While not wishing to minimise the conflicts of interest of AHPETC, the consequences are fairly small compared to the glaring conflict of interest in which the PM’s wife (Ho Ching) runs one SWF (Temasek) while Lee Hsien Loong is the Chairman of the other (GIC). Lee Hsien Loong as the head of the Cabinet and the PM had ultimate authority to approve the appointment of his wife. As a result the PM and his wife control over $800 billion of assets.
We are not told how much Ho Ching earns as CEO of Temasek, though the fact that her husband is in a position to influence the terms of her employment and remuneration must be a serious conflict of interest that should be covered by the same disclosure requirements as related party transactions. Certainly she probably earns considerably more per annum than the $6.4 million that WP are accused of overpaying to FMSS. We also do not know whether Lee Hsien Loong is paid anything for serving as Chairman of GIC or Tharman is paid for being the Chairman of MAS.
Shanmugam weighed in to say that the MA fees had been inflated to benefit FMSS by some $6.6 million over the past four years:
“The rhetoric from the Workers’ Party is always about helping the poor man. The reality is that the Workers’ Party took money from the man in the street to give to their friends in FMSS,”
Again the mind boggles at the lack of capacity of the PAP for self-reflection on the irony of what they are saying. We all know that Temasek has sustained serious losses before now. How much have the returns of Temasek and GIC been inflated over the years by ripping off CPF account holders and paying them a below-market rate of interest? How much has Temasek gained by gifts from the Treasury of assets below their fair market value on which the managers were able to make enormous revaluation gains when they were listed or sold? SingTel and Singapore Airlines spring to mind. This still goes on. Changi Airport Group was transferred to Temasek at a valuation of $3 billion a few years back when its true valuation is probably closer to $20 billion now. Read the TOC article on Ho Ching’s losses here: http://www.theonlinecitizen.com/2009/07/breaking-news-40-billion-losses-by-temasek-holdings/
Hari Kumar was not slow to add his criticism:
Mr Nair said that it’s not that the AGO did not note any criminal activity, but that the AGO does not know if there was because of the state of AHPETC’s records.
We have not seen any evidence of outright corruption in Temasek and GIC but we would not know anyway because of the complete lack of transparency. Parliament does not even question the fake Budget presentation which is used to hide the Government’s obscene surpluses, running at about $30 billion a year, and fend off any pressure for higher spending on social programmes.
On Friday KBW outdid his previous performance with the words:
“Where the water is murky, it’s easier to fish. Opacity creates opportunity for crooks to make money.”
Talking about murky water is especially ironic given that Muddy Waters, an American short-seller that specialises in ferreting out companies committing fraud or hiding their true financial position, said that Olam was likely to go bust because of its heavy debt load and lack of positive cash flow. Inexplicably and inexcusably, Ho Ching chose to buy out the major shareholders of Olam by making an offer above the market price rather than wait for the company to fail and buy it out of bankruptcy with an offer to debt holders. I blogged about it in March 2014
And here is one of the many stories on it covering Muddy Water’s analysis. http://www.cnbc.com/id/100272657#.
The PAP manage our reserves in a totally opaque way. Yet the PAP wants us to believe that they are immune from what history has shown to be true time and again. Opacity and lack of accountability breed mismanagement and at worst, corruption.
These are the real conflicts of interest that pass almost unnoticed and yet are of far greater consequence to Singaporeans than a mere few million dollars in overpayments:
- The conflict between paying you a fair rate of return on your CPF savings and exploiting you as a cheap source of funding for GIC so it can make higher returns.
- The moral hazard which encourages Temasek and GIC to take higher risks because they know that the Singapore taxpayer and CPF holder will bail them out. Also if Ho Ching can never lose her job, she is incentivized to take maximum risks as she will then get a higher bonus with no downside if she loses money.
- The conflict between the Government’s role as owner of most of the land and desire to make a profit and its role in providing low-cost social housing
- The conflict between the Government’s monopoly control of many domestic industries and ensuring a competitive environment so that you get lower prices
- The conflict between the Government’s desire to grow the economy and revenues through the import of cheap labour and driving down wages and improving the real earnings of mid- to low-income Singaporeans.
- The conflict between the role of an Opposition MP as a check on the Government and a proposer of alternative policies and the job of running the TC. MPs should not be estate managers, which requires people with specialized training. One of the reforms I want to see is elected TCs and MPs free to concentrate on their proper role.
We should not lose focus on what this attack is really about. We must resist the PAP’s attempt to turn MPs into mere town council managers. By putting the WP on the defensive over their failings in corporate governance the real aim of the PAP is to deter the Opposition from carrying out their proper function, which is to force the Government to be transparent and accountable and govern in accordance with the people’s wishes.
We must keep out focus on what really counts and that is transparency. It is transparency that comes first and every other improvement we want to see in our society, whether freedom, justice, compassion or a more equitable share in our Nation’s wealth, flows from that. We must keep up the pressure to demand that our government supplies transparency. On the other hand, should they continue to give us only muddy waters, then we will have to make use of secrecy, the secrecy of the ballot in the coming GE.
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.
#RETURNOURCPF – MEDISHIELD LIFE PROTEST 12
JULY, HONGLIM PARK
In June 2014, the enhanced benefits for MediShield Life were announced.
It was stated that there will be substantial increases in benefits for MediShield Life that will cover all Singaporeans for large hospital bills.
At a time when Singapore is ranked as the most expensive place to live in the world, where Singaporeans yet continue to receive the lowest wages among the high-income countries, CPF is akin to an additional tax on our income.
On 7 June 2014, Singapore had its first CPF protest against the increase of the minimum sum as an estimated only 1 in 8 Singaporeans who reach age 55 were able to meet the CPF Minimum Sum and MediSave Minimum Sum entirely in cash from their CPF accounts.
There is no transparency and accountability towards how the government is using our CPF monies or the returns derived from CPF funds, all these despite MPs calling for higher rates, improvements to our CPF system practically every year.
From a cash flow perspective, the Government is still not spending a single cent on healthcare because MediSave contributions in a year continue to exceed all withdrawals including government healthcare spending.
Being a Singaporean, I’m concerned about my future and have decided to invite all political parties that took part in GE2011 to hear their views regarding my concerns.
As such, this event aims to highlight the inadequate measures in place to protect the healthcare needs of Singaporeans.
Date: Saturday 12 July 2014
Time: 4.00pm – 6.00pm
Venue: Hong Lim Park – Speaker’s Corner
4.00pm – 4.15pm Mr. Tan Kin Lian, former presidential candidate
4.15pm – 4.30pm A political party
4.30pm – 4.45pm RP Secretary-General Kenneth Jeyaretnam
4.45pm – 5.00pm SDP Treasurer Chong Wai Fung
5.00pm – 5.15pm Mr. Vincent Wijeysingha
5.15pm – 5.30pm Mr. Leong Sze Hian
5.30pm – 5.45pm Ms. Han Hui Hui
5.45pm – 6.00pm Mr. Roy Ngerng
6.00pm – 6.30pm Questions & Answers
To find out more about the event, you can go to the Facebook event page at https://www.facebook.com/events/251518938371663
Han Hui Hui
(Warning the following article contains satire. If you have experienced difficulty in the past digesting satire and parody then please consult a doctor before proceeding)
The debate seems to be getting a tad emotional, so I have responded with this light-hearted and comical piece which I hope will cool things down a little. Please enjoy. It is a parody of Hri Kumar’s Facebook post where he got a bit excited about my report on the CPF forum. Let’s chill people and stick to the substantive issues.
“Mr Kenneth Jeyaretnam leader of The Reform Party who attended my forum that somebody else invited him to, has reported the following in The Online Citizen.
Quote: “When I sat down in that room I looked at the enormous glass coffee table and thought, “Finally some transparency from the PAP.”
Mr Jeyaretnam is a liar. That did not happen in the forum. No coffee table or anyone or anything present provided Mr Jeyaretnam or any other attendee with any required transparency at any time. Opacity was the whole point of the forum and Mr Jeyaretnam lacks all credibility in suggesting otherwise.
The coffee table was not there to provide any transparency from the PAP, by the PAP or with the PAP. Any transparency it provided was purely coincidental and entirely unconnected to our policy of obfuscating the facts and replacing them with our belief system.
Mr Jeyaretnam is trying to destroy our nation by perverting our firmly held beliefs in quadruped furniture as supports for empty coffee cups, disposable chop sticks and old tissues.
To suggest that the coffee table could provide the answer to how much is in the reserves or provide answers to gaps in the budget presentation or information on the returns of Temasek and GIC is not a constructive method for conducting an accessorial-furniture-interface dialogue.
If we wanted to have an accessorial-furniture-interface dialogue I would go about it like this. I would start an Event page on Facebook, open to all so that Mr Jeyaretnam could be invited to the Event by someone else and I would comment on that public page that non-residents were welcome to accept the invitation. Then for the avoidance of doubt, as the host, I would post on my own page that I was happy non-residents were also signing up.
If it were later discovered that Mr Jeyaretnam, who is a well-known glass coffee table provocateur, had followed these steps, I would then publicly denounce Mr Jeyaretnam for “Inviting Himself”. I would smear him with the suggestion that his only intention in attending was to destroy the unique position that glass furniture holds in our robust democracy. But we are not having that dialogue so of course I won’t do anything like that.
Mr Jeyaretnam’s allegation that the coffee table provided transparency is very serious indeed
Mr Jeyaretnam’s allegation that the coffee table provided transparency is very serious indeed. It is as destructive as those people in other countries who take old furniture and up-cycle it into something useful and attractive. In fact as my video recording will demonstrate two people in that group roundly shouted at Mr Jeyaretnam in turns, entirely demolishing his arguments with their unsubstantiated stories of how much tax they had to pay to overseas for similar furniture products.
Nor did the PAP stuff that forum with PAP supporting furniture, whether a table of glass, plastic or that stuff that Ikea uses, as Mr Jeyaretnam has so evilly insinuated. Mr Jeyaretnam lacks all integrity and credibility. That coffee table was a bona- fide resident of Thompson-Toa Payoh. As such it was there of its own accord in its personal capacity. It was a non-partisan coffee table, not even an activist coffee table or a civil society coffee table. It had NOT been put there in advance or polished up by any member of Thompson-Toa Payoh CC.
It wasn’t me, it was Mr Jeyaretnam who stuffed that forum with supporting furniture. In fact everyone there who questioned my presentation or disagreed with me or smiled at Mr Jeyaretnam instead of me or wanted to shake his hand not mine, was a personal friend of Mr Jeyaretnam and just pretending to be a resident. It was ‘fixed’. There is no other reason they would have demanded the return of their CPF.
As it is my experience that many of you are childlike or otherwise “daft”, I will summarise.-“Mr Jeyaretnam was the only person at the forum seeking transparency not the coffee table.”
In an extraordinary turn of events the State Times published a letter in its Forum page yesterday from Temasek Holdings. It seems that last Saturday ST published an article (“Ways to improve CPF”) which quoted an unnamed person as saying he suspected the Central Provident Fund Minimum Sum was raised “because Temasek or GIC lost money overseas”. ( See more at: http://www.straitstimes.com/premium/forum-letters/story/temasek-doesnt-invest-or-manage-cpf-savings-20140604#sthash.jRLqDrka.dpuf)
Temasek wrote their letter in response to that comment and presumably to deny that rumour. I say it is extraordinary because not only does it fail to prove that CPF monies do not help to finance, even indirectly, the government’s injections of capital into Temasek, but a large part of the letter is simply a setting out of current government CPF policy and an explanation of the PAP’s stated reasons for increasing the minimum sum. You know, the one about increased life expectancy blah blah.
The letter was written for Temasek by
Managing Director Strategic & Public Affairs
If you want to know more about Mr Forshaw here is the blurb from an interview he gave to mumbrella.asia – a site about Asian media and marketing.
Stephen Forshaw is the managing director of corporate affairs at one of Asia’s most powerful investment firms, Temasek Holdings. He is also managing director of Temasek’s operations in Australia and New Zealand, and president of the Institute of Public Relations of Singapore.
In this interview with Mumbrella Asia’s editor Robin Hicks, Forshaw – who was comms chief for Singapore Airlines and Microsoft before joining Temasek – talks about how corporate communications is changing, how brands should respond to disaster, and why he’s a big admirer of Shell.
So now we have an Expat explaining our own government’s CPF policy to us. Who made him spokesperson for CPF and for the PAP? As he works for Temasek but is being paid to spell out the PAP’s justification for raising the minimum sum in CPF he only adds weight to the argument that the two (CPF and Temasek) are co-mingled. What will we have next? The Head of Standard Chartered ( in which Temask has a 20% stake) writing to ST to explain to us Singaporeans why women will have to start doing National Service? Or the head of Sheng Shiong writing to tell us why GST is being raised?
So does Forshaw actually dispel the fear that the minimum sum has been raised because Temasek has lost money and the government needs to get the money from somewhere else? No. This is what he does say.
“As for Temasek’s performance, we have more than doubled our portfolio value since 2002, excluding any net new capital.
As of our last reporting date of March 31 last year, returns to Temasek for newer investments made since 2002, when we started investing directly in a growing Asia, have exceeded returns since 2002 for older investments made prior to 2002.”
So, that’s as clear as mud. It seems Temasek are saying that positions put on since 2002 have done better in the 11 or so years up to 31 March 2013 than those before 2002 but again doesn’t say whether this is from 1974 up to 2002 or for example, 1992- 2002.
Is the date 2002 significant? Well it could be that 2002 has been chosen for this division of performance into pre and post 2002 because it is the year Mrs PM took over as head of Temasek. (I’ve said before that it is hugely embarrassing and a conflict of interest to have the PM’s wife head up our sovereign wealth fund.)
But I believe 2002 was chosen because that date was during the post-9/11 recession and at the lowest point for the markets before the Great Recession of 2008) so of course anything after that is likely to look good, by comparison
Temasek doesn’t provide a link to the balance sheets or any other data. Critically for me or anyone wanting to study their performance, Forshaw doesn’t provide information on the valuation criteria that Temasek uses. I am particularly interested in their unlisted positions. Again it comes down to transparency and public listing would achieve that.
Still this divide into older badly performing stock and the better performance post 2002 is worrying. If I ran a fund in which all the longer term positions were performing worse than the newer ones, I would expect my investors to be concerned. Consistency is everything.
Of course it begs the question of why aren’t the poorer, older performers culled? Or is there another explanation for recent out performance such as recession recovery or another more sinister explanation or even a bubble waiting to burst.
Actually I have already provided an answer for part of this previously when I highlighted the Olam takeover scandal. That kind of manoeuver allowed Temasek to put the complete purchase on the books as a profit because they had owned shares before what is widely believed to have been a leak in the takeover process, that pushed the share price up enormously. Other Assets such as Changi Airport were transferred to Temasek for a 10th of their true market value. Instant profit.
Go back to the quote again and see that Forshaw tells us “As for Temasek’s performance, we have more than doubled our portfolio value since 2002, excluding any net new capital. –
Let’s look at that “new capital“. That is money that the government injects into Temasek from time to time. The government is able to inject money or assets into Temasek because of the constant stream of new investment it receives from CPF. So Temasek is getting CPF money indirectly. Temasek’s answer to the public via the ST forum is economical with the truth to say the least. CPF may be invested elsewhere and not directly into Temasek or vice -versa but it all comes from the same pot which is government capital or surpluses. As the CPF monies are available for the government to invest elsewhere, it frees up capital to inject into Temasek.
Let’s look at that doubling of the portfolio value since 2002. The S&P 500, the Hang Seng and most global stick indices have doubled over the same period since the low of 2002. So in other words if you had been investing in an index Fund and gone on holiday since 2002 you would have done as well as Temasek. Had Temasek done nothing in that time, the simple fact of the market rising would have created the same doubling over that period. Bravo!
Temasek Holdings writes that it is not investing or managing CPF money. 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 question is unanswered. Why is the Central Provident Fund Minimum Sum being raised ?
An Open Letter to the Minister for Finance
Mr. Tharman Shanmuguratnam
Ministry of Finance
100 High Street
#10-01 The Treasury
You recently called in the Auditor-General to audit the accounts of Aljunied- Hougang – Punggol East Town Council (AHPETC) because the auditor’s reports raised serious questions about the reliability and accuracy of the town council’s financial and accounting systems. The report raised equally serious concerns over alleged discrepancies in the accounts of the former PAP-run Aljunied Town Council. At issue is the sum of 1.12 million dollars, which the former Aljunied Town Council had recorded as a receivable due from the Citizens Consultative Committees for improvement projects and whose validity has now been denied by both the Ministry for National Development (MND) and HDB.
I would remind you that the Reform Party, in its budget analysis for 2012 and 2013 and my open letters to you and to Christine Lagarde, has repeatedly raised serious questions about discrepancies and missing information in the way you present the Budget and the picture therein of the government’s finances. In particular the Statement of Assets and Liabilities does not match with the total returns that Temasek and GRC claim to have earned since inception and the revenues earned from the sale of land.
We have repeatedly asked you for an explanation for these discrepancies and to supply the missing information. I therefore have great sympathy with my colleagues in the Workers Party who say that they have been unable to get data from government bodies for an item in the accounts run by the former PAP town council.
My experience has also been that lack of transparency and freedom of information makes obtaining critical data an impossibility.
May I remind you that the Auditor-General’s report for the financial year 2011/2012 given to the President and publicly available since July 2012 contained an item under the heading Ministry of Finance, “Presidents concurrence not obtained for promissory note issued.”
In short your Ministry had been found to have breached the Constitution and unlawfully granted a loan using taxpayers’ money to the International Development Association, the soft lending arm of the World Bank without obtaining the President’s approval as required under Article 144. The promissory note had to be returned and reissued in order for your Ministry to comply with the law. We were not informed what had happened to the monies the IDA had already drawn down. A junior civil servant was blamed and your ministry promised to put new procedures in place. I would ask you to let our taxpayers know what those new procedures and checks and balances are so that we can have confidence that the controls in your Ministry are sufficiently robust, reliable and accurate.
I believe your recent address to Parliament on 21 January 2014 when introducing a motion for increasing Singapore’s capital contribution to the IBRD (International Bank for Reconstruction and Development) raises further cause for concern over the reliability of your Ministry’s accounting treatments.
In Parliament you describe an accounting treatment for the above IBRD capital contribution which if correct renders the treatment that you argued in court last year, applied to Singapore’s loan commitment to the IMF false. (in Civil Appeal No. 154 of 2012 (Jeyaretnam Kenneth Andrew.)
In court I argued that the IMF loan commitment was a liability and therefore caught by Article 144(1) of the Constitution and you argued at that time, that it was an asset and therefore not caught by 144(1). The judges accepted your version that it was an asset and therefore 144(1) did not apply and I lost my case.
I am writing to you to ask you to explain how you could now give a description in Parliament for a similar scenario, where Singapore is agreeing to provide callable capital to the IBRD on demand, explaining that this represents a liability not an asset.
The two bilateral pledge agreements are in fact very similar structures and therefore you cannot at the same time argue that one is accounted for as an asset and the other as a liability.
If I may refresh your memory the Hansard record for the IBRD motion records you as stating:
“The remaining 94% (of Singapore’s subscription), known as callable capital, will not be drawn by the IBRD except in extreme circumstances, when it cannot meet its obligations on borrowings or guarantees. To date, the IBRD has never had to call on the callable capital. It is an AAA-rated institution with a sound balance sheet for over 50 years. Nevertheless, the full increase in Singapore’s subscription to IBRD’s capital will be charged to the Consolidated Fund, as the callable capital represents an increase in the Government’s financial liabilities. “
I thank you for pointing out to our people that no matter what impeccable history a AAA rated institution has, there can be no categorical case for stating that the callable capital will NOT be in fact called upon. In fact as you will be aware supranational financial institutions, such as the IBRD and the IMF, are awarded their AAA rating and quasi-sovereign status precisely because their member countries, including Singapore, guarantee to bail them out.
I refer you instead to the sentence in italics in which you agree with my previous arguments that a callable capital subscription of this nature represents an increase in the financial liabilities of the Government. In lay terms callable capital is callable- however unlikely- and therefore must be written down in our balance sheets in the Liabilities column not the Assets column.
At the time when it is finally called upon it then swops sides and becomes an asset though you have chosen to write down its value to zero. We are agreed on this – that an actual loan or called upon capital commitment must be listed as an asset. Our subscriptions to the IBRD give Singapore voting rights and allow us to influence policy and thus qualify as assets. I agree that until such time as our commitment is called upon it should be defined as a liability.
This is in fact exactly what I argued in court re the IMF. You argued the opposite.
Your different explanations on two separate occasions now make you vulnerable to accusations of contradicting yourself or even knowingly misleading the court by presenting two opposing descriptions for the same thing. The only way you can avoid such accusations would be to argue that a loan commitment to the IMF is qualitatively different from a callable capital subscription to the IBRD. However nonsensical that argument would be.
Nonsensical maybe but it does not surprise me that Hansard shows that in the very next sentence you do indeed bravely attempt to defend the indefensible, namely to argue a distinction between the callable capital of the IBRD and that of the IMF. You do this by saying the IBRD subscriptions are ‘unlike’ our loan commitments to the IMF. It is deeply significant that this reference to the IMF loan commitment is missing from your Ministry’s Press release. And it can only be found by scrutinizing Hansard. Presumably you would not wish to widely publicize this explanation, not only because it is bunkum but also because it contradicts your previous statements in court and in Parliament.
Let us look at your exact words to Parliament and our people:
“Our subscriptions to the IBRD are hence unlike MAS’ subscriptions to the IMF’s capital, or what is called the “IMF quota subscriptions”, or its loans to the IMF, which are neither expenditures nor liabilities, but assets that remain part of our Official Foreign Reserves.”
In fact Minister you are being economical with the truth and attempting to mislead the people by lumping the commitment to make a loan to the IMF with the loan itself or with an increase in Singapore’s capital subscriptions to the IMF. Here are the three descriptions that you use to describe financial resources provided to the IMF that you run together in the above sentence:
1.”MAS’s subscriptions to the IMF’s capital”
2. “IMF quota subscriptions”
3. “Loans to the IMF.”
No. 1 is a contingent liability until it is called then it becomes an asset.
No. 2 is a different way of describing No. 1
Once they are made, actual loans to the IMF (No. 3) are treated for accounting purposes as assets (though in line with US Budget practice a reserve should be taken against the risk of loss and the fact that they may never be repaid) but so long as the IMF loan commitment remains undrawn it represents a contingent liability for the government, whether when it is drawn it represents a loan or becomes an increase in Singapore’s capital subscription to the IMF.
This can be further demonstrated by examining your answer to a Parliamentary question on 12 May 2012:
“5 These are however temporary resources, provided to the IMF in advance of the expected increase in its permanent capital subscriptions (or quota subscriptions) that will be decided in early 2014. Participating in the current round of bilateral contributions to the IMF will in effect bring forward part or all of Singapore’s likely share of the increase in the IMF’s capital base in 2014. [my italics]
6 Singapore’s US$4 billion contingent line of credit to the IMF means that Singapore is expected to lend the funds when the IMF considers necessary.”
Your argument in court that the IMF loan commitment is an asset is furthermore contradicted by MAS’s own accounts for 2012-13. The accounts show our republic’s obligations to the IMF under Commitments, which includes other contingent liabilities such as capital expenditures, leases and a guarantee to Singapore Deposit Insurance Corporation in the amount of $20 billion.
Even you must be aware that a commitment to lend money to the IMF carries risks, however negligible you want the people of Singapore to think these are.
As the Finance Minister and head of the International Financial and Monetary Committee of the IMF, who regularly meets with the US Treasury Secretary, you will know that the US treats commitments to the IMF as contingent liabilities requiring approval by Congress (see here). Furthermore as required under the US Federal Credit Reform Act of 1990 loans made by the US Government are scored to reflect the degree of subsidy or risk of loss. In 2009 the US Congress appropriated US$5 billion to cover the risk of loss on the US commitment to the IMF.
Would you not agree that the government should establish a similar reserve in respect both of our subscriptions (whether called or not) and our loans (whether made or commitments)?
If the IMF loan commitment increases the financial liabilities of the Government (including within the Government the assets and liabilities of the MAS as defined by Article 142 of the Constitution) then you have clearly breached Article 144(1). This follows from former AG Chan Sek Kheong’s opinion in 1998 that “transactions captured by Article 144(1) are those that, logically, increase the financial liability of the Government.”
There can therefore be no doubt that our loan commitment to the IMF should have received Parliamentary and Presidential approval. It further follows that by representing a liability as an asset to the Appeal Court you led the Court to rule that it was an asset and to dismiss my appeal.
Whilst you may use sophistry and a constitution re-written by the PAP government to be so vague as to be unfit for purpose and hoodwink our people – it will not pass on a global stage. Already our republic’s banking secrecy laws are bringing us under increasing pressure to comply with global money laundering regulations. We have become known as a haven for dirty money. Our love of accepting ultra rich individuals and large institutions that take advantage of our low tax regime and preferential treatment for non-citizens is also under fire.
As the budget is due to be presented tomorrow, I would hope recent events will persuade you to set out Budget 2014 in an internationally accepted and transparent format as prescribed by IMF and not the deceptive and incomplete format that your Ministry presented in 2013 and in previous years.
After the AG’s Chambers was given permission on Wednesday to take action against blogger Alex Au for contempt of court, the following statement was issued. I am pleased to say that nearly 170 people signed it, including academics and civil activists. Sadly there are only a few politicians included in the signatories, John L Tan and Teo Soh Lung of the SDP, Osman Sulaiman and myself from the RP. Like everyone else I would like to see Mr. Au’s claims rebutted in public. We need to uphold public confidence in the judiciary and that means the public must be allowed to form their own opinions on judicial processes.
This is part of a larger picture in which the Law Society had its independence removed by Lee Kuan Yew along with the right of appeal to the Privy Council after my father’s conviction in the Singapore courts was overturned by a Privy Council judgement. We also lost trial by jury. In 2012 the UK Law Commission recommended abolition of the offence of scandalizing the judiciary saying, “You might commit the offence if you do or publish anything that ridicules the judiciary “. But what ridicules the judiciary more, removing the Law Society ‘s independence and abolishing the right to trial by jury, a fundamental right of the English legal system since Magna Carta in 1215, or subjecting the judiciary to some degree of public scrutiny. You might find it helpful to read my letter to the Wall Street Journal in support of Alex Au in which I mentioned that defamation suits in the Singapore courts are used to silence critics of the regime.
Singapore 29th November 2013
We are deeply concerned that the Attorney General’s Chambers (AGC) has been granted leave to take action against Singaporean blogger, Mr Alex Au, for “scandalising the judiciary” in his blog post, “377 Wheels Come Off Supreme Court’s Best Laid Plans”.1
The right of free expression is enshrined in Article 14 of our Constitution. We believe that robust public debate is necessary for national progress. The AGC’s action, however, reflects an overzealous desire to police public opinion. This cannot be healthy for a mature, first world nation. If Mr Au had erred, then his claims should be rebutted in public. This would enable Singaporeans to make up their own minds.
We agree that it is important to uphold public confidence in the judiciary. However, this cannot mean that our judges should not be subject to scrutiny. The AGC’s action, rather than enhancing confidence in the judiciary, might weaken public confidence. It also implies that the public is not allowed to form opinions on judicial processes.
International legal opinion supports the advancement of the law in respect of public comment. In 2012, the UK Law Commission recommended abolishing the offence of “scandalising the judiciary” because it is “an infringement of freedom of expression and out of step with social attitudes”. The Commission noted that the offence,
“belongs to an era when deferential respect to the judiciary was the norm. But social attitudes have changed. Enforcing the offence today would do little to reinforce respect for the judiciary and, if judges are thought to be using it to protect their own, could strengthen any existing distrust or disrespect.”2
We note that the AGC action against Mr Au is not in keeping with the spirit of Singapore’s position at the 2011 UN Universal Periodic Review of Human Rights that “Political postings on the Internet are prevalent, including many that are highly critical of the Government. No blogger or other online publisher has been prosecuted for such postings.”3 Further, this AGC action contradicts Singapore’s obligations in the ASEAN Human Rights Declaration, adopted on 18 November 2012. Article 23 states, “Every person has the right to freedom of opinion and expression, including freedom to hold opinions without interference and to seek, receive and impart information, whether orally, in writing or through any other medium of that person’s choice.”4
We call upon the AGC to help the Government of Singapore uphold its ideals and its international commitments, for the continued progress and prosperity of our nation.
K Z Arifa
Dr Charan Bal
Sharmeen Nina Chabra
Xin Hui Supanee Chan
Kenneth Chee Mun Leon
Chew Kheng Chuan
Chong Kai Xiong
Chong Wai Fung
Fong Hoe Fang
Foo Hui Shien, Catherine
Assoc Professor Cherian George
Han Hui Hui
Dr Russell Heng
Isrizal Mohamed Isa
Dr Khoo Hoon Eng
Koh Boon Luang
Lee Gwo Yinn
Lee Shiuh Meng Kevin
Philip Selwyn Lemos
Leow Zi Xiang
Dr Liew Kai Khiun
Gary Lim Meng Suang
Lim Kay Siu
Nicholas Lim Yew
Loh Chee Leong
Dr Loh Kah Seng
Low Yit Len
Neo Swee Lim
Ng Mei Fay
Dr Noor Rahman
Ong En Hui
Pak Geok Choo
Gene Sha Rudyn
Seet Cheng Yew Michael
Rev Miak Siew
Siew Kum Hong
Assoc Prof Paul Ananth Tambyah
Alvin Tan Cheong Kheng
Caryn Tan Sun
Eugene Tan Siah Yew
Joel Bertrand Tan
John L Tan
Tan Joo Hymn
Dr Roy Tan
Teo Soh Lung
Professor Tey Tsun Hang
Dr Pingtjin Thum
Toh Boon Hwee
Dr Vincent Wijeysingha
Wong Chee Meng
Melissa W S Wong
Wong Tong Kwong
Dr Woon Tien Wei
Rev Dr Yap Kim Hao
Yeo Yeu Yong