It's not as if the size of our reserves is an absolute secret. The size of reserves managed by MAS and Temasek is known and published. It's only the size of reserves under GIC's management that is not fully known. Still, it is not completely a secret.
There is such a thing as economic defence.
In the physical defence of our country, would you make public a full inventory of your weapons and armoury?
Isn't it sad when learned people cannot understand why the full size of our reserves should remain a secret?
I 'blame' the PAP for people's ignorance. I tell you why. The PAP Government has succeeded in protecting Singapore and Singaporeans from the full impact of every crisis thus far, so much so that Singaporeans lack the full experience of a crisis. They think overcoming a crisis is a breeze.
The Asian Financial Crisis of 1997 was a shocker that began in Thailand. The Thai baht was the target of intense speculative attacks just before it collapsed in July 1997. For a while, the Thai government managed to defend the currency. However on 2 July 1997, it announced that it would no longer intervene and would allow the baht to float. The sharp depreciation of the baht against the US dollar began that same day.
This immediately triggered panic among investors, and other regional currencies such as the Philippine peso, Indonesian rupiah and Malaysian ringgit also began to experience selling pressure.
The contagion extended its reach to South Korea, Hong Kong and China and in1998, the crisis had spread to Russia and Brazil as their economies saw a free-fall.
In countries most affected by the crisis, banks and other companies collapsed or had to be rescued, and many others were forced to downsize, resulting in massive unemployment. In Indonesia, the crisis even led to the resignation of then president Suharto.
As a small open economy Singapore is extremely vulnerable to external developments. The large and adverse economic shocks of the Asian financial crisis could potentially have had a devastating effect on the Singapore economy.
Singapore, however, withstood the financial storm lashing the region and the Sing dollar did not come under the kind of pressure that many other currencies faced. Singapore was sheltered. The PAP Government took various measures to keep Singapore competitive.
The result is that Singaporeans including learned Singaporeans are unable to imagine what a speculative attack on the Sing dollar can look like. The only people who fully understood what happened during the AFC were people in government and MAS, civil servants and Heng Swee Keat.
With every successful handling of a crisis, Singaporeans have come to take Singapore's success for granted, so much so 𝐭𝐡𝐞𝐲 𝐞𝐯𝐞𝐧 𝐭𝐚𝐤𝐞 𝐒𝐢𝐧𝐠𝐚𝐩𝐨𝐫𝐞'𝐬 𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐭𝐨 𝐰𝐞𝐚𝐭𝐡𝐞𝐫 𝐜𝐫𝐢𝐬𝐞𝐬 𝐨𝐟 𝐚𝐥𝐥 𝐩𝐫𝐨𝐩𝐨𝐫𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝.
In normal times, the Singapore dollar is actively traded with a daily turnover estimated at US$37 billion! This is the volume in normal circumstances. ( US$9.5 trillion annually).
Can you imagine how much firepower you would need if the Sing dollar comes under speculative attack? The financial strength that the government would also need to take other measures as well to maintain investors' confidence so your financial institutions do not collapse? Otherwise, all you learned and rich people may just helplessly watch your own savings all gone in a second.
