TR EMERITUS

Cambodia held an election in July this year that was won by the ruling Cambodian People’s Party (CPP) of Prime Minister Hun Sen, extending its nearly four-decade grip on power. Aside from the CPP, there were 17 parties running, but most are obscure and none have the clout or resources to mount a challenge to the ruling party. The result was a landslide victory for the ruling party, just as it had been in the 2018 election. The CPP encountered the biggest challenge to its rule in the 2013 election, when it won less than half of the votes, closely followed by the newly formed opposition Cambodia National Rescue Party (CNRP), reflecting the CNRP’s popularity among the youth and trade unions and some disenchantment with the CPP. In the following years, the CPP used its influence over the courts and democratic institutions to hobble its rival, culminating in the CNRP’s dissolution nine months before the 2018 election, for its alleged plot to overthrow Mr Hun Sen’s government. The CNRP’s leader was arrested on treason charges. Large numbers of opposition figures fled into exile and hundreds were convicted of crimes, mostly in absentia in mass trials. Sounds familiar? A similar drama played out in Singapore in the 1960s. In 1959, the PAP won the General Election with a pool of candidates who were very popular with the people, especially the Chinese working class, and formed the government. However, due to differences in ideology, this group split from the PAP and formed the Barisan Sosialis, becoming the main opposition party. This severely weakened the PAP. It was highly probable that the Barisan Sosialis would win the next general election in 1963 and form the next government on account of their popularity and the PAP’s loss in two recent by-elections. However, it was not to be. 113 people were detained in Operation Coldstore for alleged communist activities and for supporting the Brunei rebellion, just before the general election. The detainees included 24 leading members of Barisan Socialis, including Lim Chin Siong, the Secretary-General, whom many people regarded as the “future Prime Minister of Singapore”. They were charged under the Preservation of Public Service Security Ordinance (PSSO), the predecessor of the Internal Security Act, and detained without trial. Some detainees would go on to spend over a decade behind bars without ever being formally charged with a crime. With a considerably weakened opposition, the PAP won the general election with more than 70% of the seats while the Barisan Socialis managed only to secure 25%. It was a close shave for the PAP, but they survived as a result of some unethical and un-democratic maneuvers, to put it mildly. The Barisan Socialis was further weakened after the GE. In 1966, 23 leaders were arrested and detained without trial pursuant to the Internal Security Act, for allegedly attempting to arouse a mass protest outside of parliament. The longest detainee, Chia Thye Poh, MP for Jurong SMC and leader of the Barisan Socialis as well as the de facto Leader of the Opposition at the time of his arrest, spent 23 years behind bars and 9 years under strict rules not to leave Sentosa. As the Opposition became non-existent and the PAP dominating Parliament, the government became more and more autocratic. However, they did a very good job of bringing prosperity to Singapore and quickly transformed it from Third World to First World. Likewise, under the dictatorial 70-year-old Hun Sen, Cambodia has achieved lower middle-income status, with improvements in health, education and infrastructure. Its textile manufacturing sector, mainly for famous Western brands, has boomed, creating vital jobs, while the economy grew on average 7.7 per cent between 1998 and 2019. In both countries, democracy went down the drain. However, the ensuing stability has been the foundation from which the economic growth has sprung. Today, Singapore’s GDP per capita put us at the top-ten richest country in the world. Our currency is so strong that people can take regular overseas holiday. We have world class infrastructures, live in decent houses (albeit expensive and on decaying leases), the economy is vibrant, and the country is generally clean and safe. I thus often hear people say we are so much better compared to many other countries, why are you complaining? That’s because this autocratic government has not been listening to the wishes of the people, despite this being a Republic. They have instead been listening to big business and the very rich people - a bigger population, more foreign workers, higher GST (but low corporate tax and nil capital gains tax and inheritance tax), Free Trade Agreements to protect the profits of foreign corporations among others. The result is that this has become a very expensive and stressful society. People have to work very hard just to keep up with the high cost of living. We are human beings, not robots. We need more than basic physiological needs like food, shelter and safety to thrive. We need security that our livelihood is assured, so that we can focus on doing creative and fulfilling work; to participate in the governance of our country; enhance our self-esteem; to self-actualize; to be ourselves. However, many people are stuck at just trying to secure their physiological needs. They have to work long hours with no work life balance, let alone pursuing higher order goals. (Perhaps, this is what the powers-that-be want, and thus by design). Many people are constantly worried that they are just one major setback from ruin, because their savings, if they have any, can be depleted very fast as Singapore is a very expensive city and the government frowns on providing comprehensive safety nets. The people thus are like the proverbial mice on a treadmill and cannot stop running. In that sense, Singapore is a high class prison - “you can check out anytime you like, but you can never leave”. No wonder, many woman would rather not give birth, where workers are the most unhappy in the world, where mental illness is prevalent and suicides are way too high. The silver lining is that Singapore is now a First World Country with an educated population and a big financial reserve. The time is ripe to have a conversation as to whether we want more of the same, that is, an autocratic society dedicated to the pursuit of profits so that GDP per capita can continue to rise, even at the expense of the wellbeing of the people, or, gently rock the boat by pushing for more democracy and therefore policies that align with the wishes of the people, so that their wellbeing will be better served, even if some investors will shun us, especially those who derive their profits mainly by exploiting the people. No, I am not complaining. I am writing so that people will think about the type of society they want their children to grow up in, and hopefully, push for a better one. I am a schoolteacher, and it saddens me that many innocent children I see everyday, who are indoctrinated daily with the “good vibes of our country” will grow up to find that it isn’t what we make it out to be; that they too will be a “prisoner” one day if we continue to put profits ahead of the wellbeing of people.   Foong Swee Fong      Read More →

Mr Tan Kin Lian The True Independent- Tan Kin Lian! It is easy to claim that you are independent from the establishment. All 4 candidates for the Presidency are claiming to be independent. I urge each and every one of you to judge them by their record,past associations and deeds.Once you do that you will quickly be able to discern who is a true independent. I have spoken at countless Hong Lim park events, criticising the PAP’s policies which have made life for Singaporeans harder and less free. I would always see Tan Kin Lian at those events,and most times he was a speaker as well. Below are just a few of the occasions when Kin Lian has spoken out in support of the common man. During the global financial crisis in 2008, he organized and spoke at many rallies in Hong Lim Park to highlight the plight of thousands of small investors who suffered large losses on minibonds that were supposed to be secure investments and sold to them by the licensed banks. On later occasions, he spoke in Hong Lim Park against the proposal to increase the population to 6.9 million people, as outlined in the population white paper, the proposed increase in GST and other issues that worry the ordinary people. Around 2017, he spoke on the large financial losses suffered by over 30,000 investors who bought the preferential shares and perpetual notes of an iconic company, Hyflux. These securities were marketed as safe investments. Tan Kin Lian strongly believes in the need to protect the financial security and the livelihood of the ordinary people. He hopes to be able to play this role effectively, if he is elected as President of Singapore in the 2023 presidential election. Singapore needs a truly independent President to Bring back TRUST,Give us HOPE! Tan Kin Lian will be The People’s President!   Lim Tean      Read More →

This is the 2nd installment of my Eh, Goondu series. In her 24 Jun Facebook post, Ho Ching also touched on national reserves and past reserves. Just about everybody who has written or commented on national reserves, got it all wrong. President Ong Teng Cheong got it wrong. Ho Ching got it wrong. So did Kenneth Jeyaratnam, Leong Mun Wai, Prof Christoher Balding, one Michael Petreaus, and many other luminaries. A bold statement, but let me explain. Reserves It is not a matter of who said what reserves are. It is not subject to interpretation. The Constitution of Singapore defines reserves as “the excess of assets over liabilities of the Government, statutory boards or Government companies”, the last of which refers to GIC and Temasek. The Constitution does not mention whether the entities are to be taken on a group consolidated basis, ie, inclusive of hundreds of companies fully and more than 50% owned. It is assumed to be group consolidated. What an entity owes to shareholders is Equity, which is represented by assets less liabilities. Hence the Constitution takes the accounting term of Equity as “reserves”. To drill down a bit, Equity comprises of Paid-up-capital, Undistributed Profit & Loss and General or Specific Reserves which are funds set aside for some purposes. If there are “reserves” it means there are net assets to back it. But except for cash, the assets are not fungible. Cash is mutually interchangeable, one can easily replace another. What this means is that you cannot identify which are the assets that represent the “reserves”. A simple example makes this clear. Suppose an entity has Capital of $200m which is deposited with a bank. It borrows $400m, again deposited with a bank. It now has total assets of $600m cash. So now the “reserves” comprise of only Capital of $200m, represented by Assets $600m less liability $400m, ie net assets of $200m. So if you want to identify the assets that make up the “reserves”, you go down to the bank and count $200m cash, put them aside and say these are “reserves”. Suppose the $600m was spent to buy a piece of property. So now the “reserves” is still $200m and total assets remain $600m. It is now impossible to identify the assets to represent the “reserves”. You can’t cut up the land and say this part is worth $200m and is the “reserves”. The “reserves” is simply backed by a portion of the total assets. And this is the real case in almost all situations. Anyone who talks of a compilation of assets to present as our “reserves” have fundamentally misunderstood the whole thing. OTC chased after a list of government assets which is technically near impossible. How do you quantify the cost of Nichol Highway, Ridout Road, Anderson Bridge, etc. Even if that is possible, all the assets aggregated do not represent “reserves”. They are total assets. How do you split the assets, which to represent reserves and which to liabilities? To add to the complexities, which part of the assets of subsidiary companies which are not 100% owned, belong to our national reserves? Ho Ching went down the same rabbit hole as OTC when she wrote “Of course, at the margin, we can count other assets like computers, buildings, tables and chairs, as well as flower pots and curtains as part of our reserves.“ She spent several paragraphs of her post discussing these physical assets. On the other end of the spectrum, folks like KJ, LMW, Balding, Critical Spectator, and almost everyone who has commented online, refer to the investment portfolios of GIC and Temasek, as well as the foreign reserves of MAS, as national reserves. Going by the definition of “reserves” above, these investments and foreign reserves are not totally our national reserves. That is because on the other side of their balance sheet, they have massive liabilities. Only a portion of the investment portfolios form our national reserves. It is impossible, and neither is it necessary, to identify them. But this does not mean it is not possible to determine how much the “national reserves” are. To do this, simply follow the Constitution. Add up the net assets of the government, statutory boards, the 2 sovereign wealth funds. Takes only a few man-days to do that. Past reserves The present administration is the 15th Goverment and was formed in July 2020. Thus any reserves accumulated before 2020 are considered past reserves. The President has the authority to veto any spending by the government if in his opinion, past reserves are being, or will be, used. This is crystal clear to everybody. Job of the President as regards government spending Online comments indicate a general public very concerned about government spending excesses and wrong priorities. There is heightened demand for an independent President with a more socialist soul. Many want to see a President who can play a more active role in influencing policy making and help steer the moral compass of a government that seems to be hitting new lows again and again. I believe presidential hopefuls like Tan Kin Lian and George Go have also made expressions in that direction. Sorry to disappoint. The President’s role is strictly ceremonial. There is no way the President can interfere with the Executive on any policy matters except in 3 areas – (a)the appointment or removal of certain key personnel specified, (b)over-rule the Prime Minister and green-light a graft investigation by CPIB, and (b)spending on past reserves. The budgets of government and statutory boards are discussed in parliament and then presented to President to rubber stamp his approval. Approve he must. He has no option. Unless the Government and statutory boards inform him the spending is dipping into past reserves, which by law they have to pre-advise him, or in his opinion, he thinks the budget will cause past reserves to be utilised, then he MAY exercise his right not to approve the budget and send it back for revision. Other spending bills are processed similarly. In this way, the President holds the 2nd key to past reserves. Ho Ching wrote : “Hence, the function of a 2nd key is not to peer into the safe, but to judge if there is a real emergency, and if the amounts being asked for is reasonable as a rainy day need or even as a contingent need.“ Madam is right that it is a situation the President has to make a judqement call whether a dip into past reserves is justified. That is the crux of his responsibility. However she is wrong about “not to peer into the safe”. By that I take it to mean to check the asset inventory. This, as explained above, is impossible. The assets are not fungible therefore it is physically impossible to identify what represents the past reserves. But it is relatively easy to obtain the combined net assets of the government, statutory boards and sovereign wealth funds. In other words, the book values of our national reserves. Just like the guards in the first Eh, Goondu blog, it is incumbent on the President to know what is the book value of past reserves he is taking over. In addition, he has to know the book value of reserves accumulated in the current administration. Without this information, there is absolutely no way he can diligently discharge his duties as required by the Constitution independently. The Constitution specifically provides the President access to any information he asks. OTC could have the information to determine the size of our national reserves, at least the book value. He just didn't know what to ask. Intricacies Under the Constitution, the entity presenting the budget or spending bill must advise the President when they are accessing past reserves. It’s a sort of “ownself declare ownself” (thanks to Low Thia Keng for giving us this sort of easily understood term). In order not to be blind-sided by a rogue government, the argument for the President to have his own database of past and current reserves of all relevant entities is self-evident. Under the Constitution, when there is a transfer of reserves by one entity to another, the transferee entity must also record it as reserves, and not liabilities. Furthermore, it has to be recorded as past or current reserves accordingly. The Constitution is silent on the role of President in this and we can only assume he is not in the loop. The President needs to be in on this or how else is he going to be up-to-date in his information. What happens when an entity makes a huge loss that wipes out general reserves and capital, just like MAS this year. Crafters of the legislation obviously missed this sort of intricacies. The Constitution does not address this, but I read somewhere the government does not consider it a raid on past reserves. I suppose they simply assume it as a negative current reserve. This avoids the need to go back and revise past reserves figures reactively which in time will become one big mess. Conclusion It is apparent to me the President must maintain his own database on past and current reserves. The data is dynamic due to intricacies above. This information must be readily handed over to an incoming new President. I wonder if this is actually being done and whether the Office of the President is adequately staffed to manage this. I doubt this is being done, why else would OTC felt like he was operating in the dark. If this is not done, then the President is just a lame duck rubber stamp and all talk about the 2nd key to the reserves is only for show. In my concluding installment on the Eh, Goondu series, I will dwell on the issue of SLA land as past reserves. A parting shout out : Plato said “The price good men pay for indifference to public affairs is to be ruled by evil men.”     Patrick Low * Article first appeared on Down The Rabbit Hole.      Read More →