RiskandOpportunity

ofTransparency&AccountabilityinSingapore

Singaporeexperiencedhaze,asystemicrisk,fromIndonesialast
year.Eventurningonthelight,therewasnoclearskythen.In
reality,theislandstateisfacingtransparentriskasdecisionsare
concentratedonafewpersons.

Singaporewillbecelebrating50yearsofindependence
nextyear.Hereconomicsuccessseemstoberiskfree
andhasbecomeadevelopmentmodelintheworld#0.
However,doesthecountryhavesustainabilityissues?
Lowtransparency HighAccountability
ForSingaporeans,riskisa
possiblelossifthereislow
transparency.
Opportunityisapossiblegain
iftherearemore
accountability,checksand
balances.

WorldDevelopmentReport2014highlightsseveralrisks
thatSingaporeisfacing.Thecentralbank(Monetary
AuthorityofSingapore)isnotanindependentbody.The
governmenthasfullcontrolofmonetarypolicywhich
emphasizesgrowthandcareslessaboutsocialsafety
net.
TherulingPeoplesActionPartyhasbeeninpowerfor
morethan50yearsandalleconomic,socialandpolitical
policiesarebasedontheprincipleofutilitarianismand
pragmaticapproachoftradeoffandcostsandbenefits.

TheWorldBankreportalsocallsforanindependentfiscal
counciltobesetup.Veryunlikely,Singaporegovernment
willbuythisidea.Infact,veryfewpersonsknowabout
theactualvalueofthereserveeventhePresident#1who
holdsthesecondkeyforreservedidnothavethefull
picture.

Frommonetaryandfiscalpoliciestoreserve,sovereign
funds#2andCentralProvidentFund(pensionfunds)#3,
Singaporesfutureischallengedbyhazewithlittle
transparency,checksandbalances.Theriskisfurther
worsenedbytheinformationandmediacontrol.Being
oneoftherichestcountriesintheworld,Singapores
pressfreedomranksamongstthelowest#4.

ToimprovetheriskmanagementinSingapore,the
governmentwillhavetobeopenandtransparent.Itcan
nolongerimplementpolicieslikebefore.Greater
accountability,checksandbalancesareneededto
managetherisksandopportunities.Singaporeinthe
pasthasstressedtoomuchononepartys
opportunitiesandignoretherisksfacedby
Singaporeans.TheReportstressesriskmanagement
cansavelife,preventcrisisandunleashopportunities.

BasedontheWorldBankReport,
Singaporeislikeadeveloping
country.TheReportsaysthereisan
absenceofimportantsafetynetand
insurance,includingmedical
insuranceandbasicfinancial
assistances,inpoorandlower
incomecountries.

ThelowerincomegroupnotedintheWorldBankReport
isthemostvulnerableoneandsuffersthemostunder
shocks,eitherhouseholdorsystemicrisk.Singapores
pragmaticapproachhasofferedlittlehelpstothelower
incomepeopleastheirwageshavebeenfrozenformore
than10years#5.

RiskManagement

ThepastsuccessmodelofSingaporedevelopmentneeds
furtherexaminationundertheWorldDevelopmentReport
2014sriskmanagementframework:

Knowledge:Underacontrolenvironmentandlackof
transparency,itwillbedifficulttoassessthe
uncertainties,riskandopportunitythatSingapore
faces.SincetheestablishmentofCentralProvident
Fundin1955,Singaporeansuntilnowstillfindithard
tounderstandtheoperationsofthefund#6.

Protection:Protectionframeworkisdesignedbyone
partywithoutaccountability,checksandbalances.
Theprobabilityoflossesandgainsissolelydecided
bythegovernmenteventhePresidentmaynothave
afullpictureofthereserve.

Insurance:Transferandfairdistributionofresources
isbasedonpragmaticapproachofnofreelunch,
tradeoffandcostsandbenefits.Untilrecently,
underpoliticalpressure,thegovernmentstartstoroll
outuniversalmedicalinsuranceandcashcoupons.
However,richpoorgapremainsoneofthehighestin
theworld#7.

Coping:ThepreparationtoequipSingaporeanswith
knowledge,protectionandinsurancehasfailed.Itis
onlyprovidedanddrivenbyonepartywithlimited
publicparticipation.Coping,inthiscircumstance,can
onlyfollowthepreparationwithlittleflexibilityand
adjustment.

TherisksandopportunitiesinSingaporeareuniqueand
differentfrombothdevelopedanddevelopingcountries.
Thegovernmentwantstocontinueherpragmatic
approachwithlimitedtransparencyandaccountability.
TheybelievetheyaredoingthebestforSingaporeans.
Thequestionisisitthebestforthepartyorforthe
people?Thedebatecontinues...

Singaporehasgoodinstitutionsandexpertisestoengageinrisk
management.Theonlyshortfallishowtoimprovetransparency
andaccountability.Morehazierdaysareexpectedifthesituation
remainsunchanged.

Notes:
#0
http://www.channelnewsasia.com/news/singapore/singaporeshealthcare/1271336.html

#1
http://app.mof.gov.sg/reserves_sectiontwo.aspx
Q18onvaluationofphysicalassets

#2
http://dr.ntu.edu.sg/handle/10220/4542
http://www.swfinstitute.org/swfs/governmentofsingaporeinvestmentcorporation/
http://www.swfinstitute.org/swfs/temasekholdings/

#3
http://mycpf.cpf.gov.sg/Members/home.htm

#4
http://en.rsf.org/singaporegovernmentsubjectsnewswebsites30052013,44689.html

#5
https://sg.news.yahoo.com/1000minimumwageschemeas%E2%80%98lastresort%E
2%80%99forwageshocktherapylimchongyah.html

#6
http://www.todayonline.com/singapore/whyitssohardsporeansunderstandcpf
http://news.asiaone.com/news/singapore/manyunsureaboutcpfcpflifedetails

#7
http://www.straitstimes.com/breakingnews/singapore/story/richpoorgapnotcausedrece
ntgrowthstrategiesdpmtharman20130824
http://globalvoicesonline.org/2013/10/26/singaporerejectsproposaltodefinepovertyline/