SINGAPORE said on Tuesday, Oct 19, it would not disclose details on its large stockpile of financial reserves or the return it makes on them, to guard against financial speculators. The city state -- Asia's third wealthiest society after Japan and Hong Kong -- is thought to have over a US$100 billion of reserves in the secretive Government of Singapore Investment Corp(GIC).
The GIC, which invests the government accumulated budget surpluses, has holdings ranging from Australian real estate to US equities but has never published its accounts.
In a rare admission several years ago its said the portfolio was worth about US$100 billion.
"Disclosure of the exact size of, or the returns on, Singapore's financial reserves will not be in Singapore's national interest," Raymond Lim, Acting Second Minister for Finance told parliament.
Lim was replying to a question about greater disclosure of the returns on government-managed assets to enable the public to understand the performance of such investments.
Singapore was recently criticised by ratings agency Standard & Poor's which said the city-state's investment returns had underperformed those of Hong Kong by 2-4 percent in nominal terms since Asia's 1997 financial crisis and termed its approach to disclosure as "guarded".
State investment agency Temasek, which has large stakes in most of Singapore's biggest listed and unlisted businesses, published its first annual report in 30 years just last week.
Temasek disclosed its average annual rate of return was just three percent over the past 10 years, although its returns over 30 years have averaged 18 percent a year.
Lim said the reserves were key to maintaining confidence in, and discouraging speculation on, the Singapore dollar.
"While market traders do not doubt that the government has substantial resources to defend the Singapore dollar, they do not know the exact amounts nor full details of the asset allocation nor the investment criteria," he said.
"Publishing this information would make it easier for speculators to plan their attacks on the Singapore dollar."
This announcement that GIC will not release any information pertaining to the specifics of its overseas investments or size of its reserve etc on the ground of sensitivity of information or vulnerability to foreigners' speculative attack on the country's dollars or something else is ill advised.
It is like telling a three-year old child : "Please do not ask questions. You will know what it is all about when you grow up."
Is it the way the government wants to continue to hide vital information showing its accountability and transparency to the public of how it invests citizens's hard -earned monies. If the government gives such a reason, and monies are lost in projects due to misuse or negligence or judgmental errors, who is going to compensate the people's losses?
People have the right to ask question like how are the decisions made and their quality and professionalism of those decisions involving any major investments of citizens' billions in any overseas project. They don't want monies to be lost again in Souzhou or Micropolis and will want well-considered deliberation by a panel of experts whom the people feel comfortable with.
So they will ask: "Where is our monies?" and many other questions like are the investments over the past 20 years earning out-performing yields better than say A2 class of investments. If not they would prefer these monies to be banked at home to support job creations within the economy and not to benefit the foreigners.