The 4 stages of a country according to Ray Dalio. Which stage are we in?

The 4 stages of a country according to Ray Dalio. Which stage are we in? 

Some Singaporeans say we are very rich. We have such huge reserves, they say. Trillion, some say. Enough already. We can afford to spend more. Shockingly, academic Donald Low asked 'who or what are we saving for'. 

Reality check! 

We are but a very, very small country, so small that a former Indonesian president described us a just a tiny red dot. You can drive from one end of Singapore to the other end in a very short time. 

We have a very open economy and it's not a choice. Therefore our economy is very sensitive to global development and changes, more sensitive than others. 

That is why during the global financial crisis in 2008, Singapore was the FIRST East Asian country to slip into a recession. 

Are we rich? 

We have no natural resources. We have nothing under the ground or in the sea. No huge land mass either. Compared to resource-rich countries, no matter how much money we have, we in fact have nothing. 

In a crisis, if a country has no money, they can at least sell their natural resources for money. Singapore? All we have is money. We have nothing to sell for money. We only have money with which to buy what we need. 

Can anyone predict the future? Can anyone tell how long a crisis can last and if we will have enough to sustain the population of Singapore throughout a crisis? 

This tiny piece of land we have is 720 sq km.

Sell land, WP Pritam Singh suggested in Parliament, and use the proceeds for spending. 

This just gives you a glimpse of the kind of government you can expect from WP if they are in the driver's seat. 

In case you do not know, land is part of our reserves.

The more you have, the greater the effort you need to put in to defend what you have, or it will be gone.

Fake news on Singapore's debts

Half truths are worse than an outright lie. 

Selecting cropping to create fake news. This is how Ivan Koh of the 'Return my CPF' gang did it. Taxes are raised because the government is in debt. What a lie. 

The TRUTH was cropped away from you. 

The TRUTH is that Singapore is a NET CREDITOR country and NOT A DEBTOR country. 

The Singapore Government has no external debt. It is a domestic debt. The Singapore Government borrows to invest and not to spend.

Why does Singapore borrow? Because she can borrow cheap and invest her funds. 

Why can she borrow cheap? Because she is a triple-A credit-rated country. 

Singapore is one of very few countries left in the world with triple-A credit rating. 

Countries that have dropped out of the triple-A rating find it near impossible to regain that rating.

GST Hike: The easy path vs the honest path

This is what an Honest Government does, being upfront, confronting the realities, taking the difficult path, and explaining to Singaporeans why this is necessary. 

Hopefully, Singaporeans will be able to see the larger picture. 

On the need to raise GST, Finance Minister Heng Swee Keat said that it was a difficult decision and it was difficult news for Singaporeans, but it was a decision the Government came to after having scrutinized all possible alternatives.

Raising corporate tax, for instance, was not appropriate when other countries are reducing corporate taxes.

So a corporate tax hike could have "unpredictable consequences" - including the possibility of businesses shifting out of Singapore.

The tight fiscal position Singapore is in is not just for a year or two but over the long run.

The $9.6 billion surplus for FY2017 was due to exceptional factors - a buoyant property market brought in higher stamp duties and financial market fluctuations led to a big jump in investment returns for the Monetary Authority of Singapore (MAS).

Such factors can always turn the other way round, as Min Heng said and we cannot assume that they will always be positive.

The easy way, Mr Heng said, is to "put our heads in the sand, pretend that there's no problem and then go on and assure everybody that, look we have a wonderful big surplus in this year's Budget and, therefore we are okay, but I don't think that will be honest and I would not want to do that."

This is how an honest government looks like. 

You know where the surplus comes from and you know where it is going.

Speaking at a forum organized by Bank of Indonesia and the IMF, DPM Tharman Shanmugaratnam said:
"The Budget announcement of a future increase in GST from 7 to 9 per cent is a part of the balance that we are striking. 

That balance between staying competitive, ensuring that we can grow at a sustainable pace, but at the same time staying inclusive, and in particular, being able to afford the quality healthcare that an ageing population needs - that's foremost on our minds."

Reserves: Saving for rainy days

The strength of the Singapore dollar has allowed Singaporeans to enjoy many good things.

They can go for affordable holidays and shop in neighbouring countries. Singapore can also import goods and essentials more affordably.

Our reserves signal to currency markets the strength of the Singapore dollar and we should not take the use of our reserves lightly, Minister Chan Chun Sing said in his new year message.

“How much we spend and how much we save will also signal to the currency markets what they can expect the strength of the Sing dollar to be,” Mr Chan said.

“If the world thinks we are running an irresponsible or unsustainable fiscal policy, you can well imagine what they will do to the Sing dollar,” he added. “If the world does not believe in the strength and stability of the Sing dollar, you can also well imagine what will happen to our savings and our reserves.”

Indeed!

The size of our reserves during the Asian financial crisis in 1997 put Singapore in a strong position and left the Singapore dollar relatively unscathed when the currencies of many countries came under assault and were falling like dominoes.

The global financial meltdown of 2008 also shows how crucial financial reserves were to a small open economy without natural resources like Singapore.

This was first time the government had to dip into the past reserves.

To shore up confidence in Singapore's financial institutions, the government used $150 billion from our reserves to guarantee all bank deposits from October 2008 till the end of 2010.

The guarantee covered all Singapore dollar and foreign currency deposits of individuals and non-bank customers in banks, finance companies and merchant banks licensed by the Monetary Authority of Singapore (MAS).

Then in January 2009, because of a fast deteriorating global economic environment and facing the prospect of a deep and prolonged recession, the government sought the President's approval to take out S$4.9 billion from past reserves to fund two one-off measures to boost the economy, namely, the Jobs Credit scheme and the Special Risk-Sharing Initiative (SRI) and to save jobs. 

When you have no natural resources and no vast land either, the size of your reserves, no matter how big, is never enough, not forgetting that the size of your reserves is also subject to currency fluctuations and can change overnight.

Academic Donald Low asked:

".. what or who are we saving for, considering that future generations of Singaporeans are likely to be better off than the current generation of Singaporeans entering retirement?”

A shocking question coming from an academic from a renown school.

The answer is: We are saving for all Singaporeans and for rainy days.

Reserves: Every dollar saved will help us earn more to meet the needs of future generations

Keeping half of Singapore's earnings from its reserves is important as it signals to currency markets "the strength of the Singapore dollar", Minister in the Prime Minister's Office Chan Chun Sing said on Saturday (Feb 24).

The strength of the Singapore dollar allows Singaporeans to “enjoy many things”. 

“For example, we can import goods and essentials more affordably. We can also go on holidays more affordably. People are also coming here to work and earn our Sing dollar,” he said.

”But if the Sing dollar is weak, we will also see the opposite of these very examples I’ve mentioned. We should not take the use of our reserves lightly.”

Mr Chan said he would not “go through the math of this strategy”.

“Suffice to remember that every dollar we save and put back into the reserves will help us earn more to meet the needs of future generations. This is especially when our population is not growing as fast and when our population ages. On the other hand, for every dollar of earning we spend now, will mean more than one dollar plus investment returns less, for the next generation.”

Another “important reason” for the Government’s position: 

“How much we spend and how much we save will also signal to the currency markets what they can expect the strength of the Sing dollar to be,” Mr Chan pointed out. 

“If the world thinks we are running an irresponsible or unsustainable fiscal policy, you can well imagine what they will do to the Sing dollar,” he added. “If the world does not believe in the strength and stability of the Sing dollar, you can also well imagine what will happen to our savings and our reserves.”

Budget 2018: Courage to do the right thing and not make narrow personal calculations

Doing the responsible and right thing. 

Some political observers said that the PAP is taking a political risk by announcing the GST increase before the upcoming General Election — which must be called by January 2021.

Asked if the Government was concerned that opposition parties would use the GST hike against the PAP, Finance Minister Heng Swee Keat says the Government cannot make narrow personal calculations.

Those in position of responsibility must act responsibly and therefore the Government must have the courage to do what is right because "that's how we can serve Singaporeans better", he said.

Lee Kuan Yew once said:
Popular government does not mean that you do popular things all the time. We do not want to be unpopular or to do unpopular things. But when they are necessary, they will be done.

Healthcare: It's about you and your future self

Healthcare infrastructure is not just about those who are going to turn 65 in 2030. 

It's about YOU and your Future selves. Everyone will grow old one day and need healthcare. 

If the government does not prepare now, and build the infrastructure for the future, it will cost even more to build later. 

Reason? The number of working people supporting each elderly has been falling and will continue to fall. And fewer working people means? Less revenue. 

So take the long term view. Because it is about you.

Academic Donald Low asked: what or who are we saving for

SHORT-SIGHTED, POPULIST, IRRESPONSIBLE AND MISCHIEVOUS

That just about describe the status on GST and NIRC by academic Donald Low. 

(1) One year ago, Donald Low accused the AVA of being populist for culling chickens in response to complaints. 

At that time he wrote:
"The road to populism starts with ignorance and inertia on the part of citizens."

Donald Low understands very well how populism works. 

One year later, Donald Low appeals to populism, playing on the ignorance of citizens as he argues for more NIRC in place of a 2% GST hike.

(2) "Why can’t we tap more of the net investment returns to finance increasing needs, instead of resorting to a GST increase?" Donald Low asks. 

"After all, what or who are we saving for, considering that future generations of Singaporeans are likely to be better off than the current generation of Singaporeans entering retirement," he continued.

WOW! WHO OR WHAT ARE WE SAVING FOR? 

Pity the young Singaporeans. Donald Low thinks they don't need the reserves as much as their parents and grandparents because they are likely to be better off. 

Here's an academic who thinks that reserves are for helping people in their retirement. 

Does he know that our reserves are our one and only strategic resource? 

Of course he does! Donald Low is just PLAYING ON THE IGNORANCE OF CITIZENS.

For all our reserves, we in fact have nothing.

To quote former minister George Yeo. 
"We are only a small island. We have no natural endowments. And what we have .... even if you double it, what is that, compared to what others have, in the ground, in land, underwater? And in a crisis, if we have nothing, how do you sustain a diaspora?" 

During the Asian Financial Crisis when currencies came under speculative attacks, the crisis hit Thailand first in 1997 and then spread to many other countries including Malaysia, Indonesia, the Philippines, S Korea, Hong Kong and China and subsequently to Russia and Brazil as well. 

Singapore's official foreign reserves (OFR) helped to maintain confidence in the Singapore dollar at that time and defended the currency against speculative attacks.

The global financial meltdown of 2008 shows how crucial financial reserves were to a small nation without natural resources, that is heavily dependent on international trade and finance 

The first time the government had to dip into the past reserves was during this crisis. 

To shore up confidence in Singapore's financial institutions, the government used $150 billion from our reserves to guarantee all bank deposits from October 2008 till the end of 2010.

The guarantee covered all Singapore dollar and foreign currency deposits of individuals and non-bank customers in banks, finance companies and merchant banks licensed by the Monetary Authority of Singapore (MAS). 

Then in January 2009, because of a fast deteriorating global economic environment and facing the prospect of a deep and prolonged recession, the government sought the President's approval to take out S$4.9 billion from past reserves to fund two one-off measures to boost the economy, namely, the Jobs Credit scheme and the Special Risk-Sharing Initiative (SRI).

(3) "There’s nothing scientific about spending just 50 percent of the investment returns. Why not 60 percent, or even 70 percent? We’d still be adding to the principal of the reserves." - Donald Low

If there is nothing scientific about spending just 50%, then there is nothing scientific about 60% or 70%, or for that matter, 80% or 90%. 

So why does Donald Low stop at 70%? Why not carry on that argument and ask: "why not 80% or 90%" and just stop short of 100%? 

Is Donald Low parroting a popular line often heard on the internet?

Ignorance is not bliss and Donald does not tell you that the principal needs to be hedged against inflation in addition to making sure that it does not stagnate. 

Let's do some simple math. If GIC's returns is 6% and half of that is used for budget spending, then there is only 3% left to save and to hedge against inflation. You want to reduce that further? 

Think again. Don't be ignorant. . 

(4) Donald Low also assumes a rosy picture in perpetuity for GIC and Temasek. In a downturn, in a crisis, in every circumstance, in every market conditions, GIC and Temasek will be generating the billions we need for spending - like a fairy tale. 

Guess we shouldn't be hearing - in perpetuity - anyone talking about the 'billion-dollar' losses iby GIC and Temasek, and how our reserves have disappeared. LOL

What does it take to be an academic in the @Lee Kuan Yew School of Public Policy?

Defence Minister Ng Eng Hen conferred the title of Officer in the Order of Légion d'Honneur (Legion of Honour) by the President of France Emmanuel Macron.

Defence Minister Ng Eng Hen was conferred the title of Officer in the Order of Légion d'Honneur (Legion of Honour) by the President of France Emmanuel Macron. 

French Minister for the Armed Forces Florence Parly presented the award earlier today (Singapore time) at an investiture ceremony held at the Ministry of the Armed Forces. 

The Legion of Honour is the highest decoration in France, and honours outstanding service by civilians or military personnel, French or foreigner. Past Singaporean recipients include former Chiefs of Defence Force and Service Chiefs.

Prior to the investiture, Dr Ng reviewed a French Honour Guard and met with Ms Parly.

Both ministers reaffirmed their commitment to strengthening bilateral defence cooperation and discussed security developments of mutual interest.

Dr Ng's visit underscores the strong and broad-based defence relationship between Singapore and France. 

Both armed forces and defence establishments have regular high-level interactions, which include policy dialogues, professional exchanges, joint military exercises, and cross-attendance of courses.

The Republic of Singapore Air Force's Advanced Jet Training has also been conducted in Cazaux, France since 1998.

Additionally, Singapore and France also have a range of bilateral defence technology interactions and exchanges, including the Singapore and France Advanced Research Initiative (SAFARI) meetings.

These wide-ranging interactions have strengthened the friendship and mutual understanding between both countries.

Source: Mindef

Creating a Better Singapore and a Brighter Future for our Children: PM Lee's CNY's message

Chinese New Year is about family.

The many Chinese New Year traditions passed down from generation to generation are steeped in family values.

Families gather on Chinese New Year’s eve for reunion dinners (团圆饭). Even those who are abroad will make an effort to connect with their families back home, and celebrate this special occasion together.

We stay up through the night to see the year in (守岁) for our parents’ longevity, and give our children red packets (压岁钱) for good fortune.

These customs reflect the enduring hopes of every generation, that our aging parents live well in their silver years, and our children grow up happy and successful, in a peaceful and prosperous world.

Honouring our seniors and nurturing the young are not just limited to individual families; they are values and attitudes which hold our society together.

As a people too, we should look after the elderly as we are the beneficiaries of their labours, and care for the young who carry our hopes for the future.

Our population is aging.

We are working to enable Singaporeans to lead active and meaningful lives in their silver years.

This means creating strong social support and community networks, keeping elders socially engaged, and building up healthcare systems and services.

It is not just younger generations taking care of their elderly parents, but today’s generation looking ahead and providing for our older selves of tomorrow.

At the same time, we strive to give our children the best chances in life.

We are fortunate to live in Asia – a dynamic and fast growing region.

We should prepare ourselves to seize the many economic opportunities around us. We should make full use of new technologies, to progress with our partners and neighbours.

We will help our young to uncover their diverse talents, and invest heavily in them through education and training, so that when they grow up they can strike out on their own, build their own families and careers, and fulfil their aspirations and dreams.

We will invest in Singapore, to build our city and infrastructure, and upgrade our living environment and economy, so that the next generation can continue to create new possibilities, prosper and flourish. 

We should uphold our time-tested Asian values of thrift, self-reliance, and leaving something more for our children, instead of burdening them with their parents’ debts. 

We must always think beyond the immediate and beyond ourselves, to look and plan over the horizon on behalf of future generations.

I hope you will reflect on these issues in quieter moments over the festive season, in between celebrating with friends and family.

The Government too will not stop thinking about what it needs to do, to ready our society for these challenges.

Minister Heng Swee Keat will deliver his Budget speech on Monday, immediately after the holiday weekend. These issues guide the thinking behind the Budget.

Let us build our shared future together, so that generations of Singaporeans can look forward to more prosperous and joyous Chinese New Years.

As we usher in the year of the Dog, let us be dogged in our efforts to create a better Singapore and a brighter future for our children. Let us also cherish the blessings of kinship, thank our elders for what they have done for us, shower our children with love, and create more shared happy memories with our families.

Happy Chinese New Year! 祝大家狗年兴旺，万事如意!