June 24, 2010 – 11:09 am

It’s a simple world. But there are people who just like being complicated.

Take the simple query of why $ingapore’s recorded public debt is $255.464 billion? The information released by America’s Central Intelligence Agency [click here] made some people wonder why $ingapore is ranked 6th in the world for public debt.

The nation-builder press, June 17, 2010.
Click on the graphic for a better view.

What you think the professor is saying? [See article below.]

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What $’pore’s Public Debt Reveals

News reports often mention the high debt of the United States and Japanese governments. At the same time, we are told $ingapore has low debt. Yet the 2008 Statistics of $ingapore notes that $ingapore’s public debt stood at $255.464 billion that year, while the Gross National Income was $250.387 billion. It would appear $ingapore too has pretty high public debt. Can you explain this anomaly? How do economists compute a country’s debt? What is included in the list of debt and what is not?

The reader has raised intriguing and relevant issues concerning $ingapore’s public finances.
First, $ingapore has a well-deserved reputation for the conservative management of its public finances. Yet its gross debt to Gross National Income (GNI) ratio exceeded 100 per cent in 2008. Some international sources project that ratio to increase to 112 per cent by the end of the year, which is equivalent to US$38,000 (S$53,000) per person (assuming a population of 4.9 million). This contrasts with a projected 2010 debt-to-GNI ratio of 60 per cent for the United States.

Unlike the US, however, $ingapore has exhibited persistent and large structural budget surpluses. Thus, $ingapore’s officially reported budget surplus averaged 7.4 per cent of GNI annually between 2003 and 2008.

The apparent anomaly of, on the one hand, having high structural budget surpluses, and on the other, a large public debt has puzzled analysts. Usually public debt is issued to finance government deficits. But past budget surpluses suggest $ingapore’s fiscal balance sheet has substantial accumulated balances, and there is no need to issue public debt.

The main limitation of the gross public debt indicator in assessing fiscal health is that it leaves out the Government’s assets from past surpluses, and whatever funds that may have been set aside, as $ingapore has done, to repay debt.

Net public debt would be a better indicator. Thus, if the net instead of the gross public debt were used, $ingapore will not exhibit any public debt. Instead, it will likely show a surplus.

In this regard, there is strong merit in routinely publishing the Government’s balance sheet, indicating the extent of past budget surpluses and their deployment. That way, we would avoid such puzzlement as the questioner has noted.

Second, why does the $ingapore Government issue debts and who holds them?

There is official data available on gross public debt according to instruments. In 2008, for example, 82 per cent of debt was in Registered Stocks and Bonds, and 14 per cent was in Treasury Bills, with the remaining 4 per cent in Advanced Deposits with the Monetary Authority of $ingapore (MAS) to be converted later into the other two categories. There is data available also on gross debt according to maturity. In 2008, for example, most of the debt was over a one-year period. There is, however, no data according to the holders of the debt.

The Central Provident Fund (CPF) Annual Report for 2008 stated that of its total investments of $153.4 billion, $150.8 billion was held in Hold-To-Maturity financial assets. Nearly all of the CPF’s assets were held between Special (non-marketable) government securities, and Advanced Deposits with the MAS. Thus, the CPF as an institution is the single largest holder of government debt. The CPF itself is passive in investing its members’ assets, content to receive administered rates of interest on its Hold-to-Maturity assets.

Other holders of $ingapore government debt include financial institutions that are required to purchase such debt as part of their prudential norms. The rest is distributed among other investors.

A major objective of issuing public debt is to facilitate intra-fund transfers within the broadly defined public sector. More recently, establishing a risk-free interest rate benchmark through issuance of longer period government securities has also been an objective.

To conclude, conventional aggregate ratios to assess fiscal health have important limitations. Specifically, they do not take into account the type of public finance management that $ingapore practises. Suitable changes in the way the Government presents its fiscal accounts could enable analysts to better assess $ingapore’s fiscal health. - Mukul Asher

Note: The writer is a professor at the Lee Kuan Yew School of Public Policy, NUS.


  2. Accounting standards in the US insure that each company presents its financials in the same way so the comparisons are meaningful. Countries should do the same. Singapore is like a country having a fund put aside for bad debts but not revealing the amount put aside so it seems on the surface that they are in a high risk situation which they are not.

    By Jay Bartlett on Jun 24, 2010

  3. I think he’s saying that while a one-year snapshot may suggest a deficit, the fact that several years of a (modest) budget surplus leaves the country ahead overall, with money “in the bank”. So the big picture doesn’t suggest a huge deficit.

    By AR Wenner on Jun 24, 2010

  4. It’s dead simple really :D

    “Your Government has been stashing away huge sums of ’surplus’ public money every year. It doesn’t tell you how much money is hidden under the bed, but it’s a BIG pile of lollies.
    “The Government, in its wisdom, knows that if it told you just how much it is sitting on, you might wonder why taxes remain so high, or - God forbid - ask why it doesn’t provide more public services for the poor.
    “So you can expect the Government will continue to publish the less meaningful figure of Gross Public Debt, rather than the more significant indicator, Net Public Debt. This will continue as long as Government is determined to keep the public in the dark about how much money is hidden away for use on a ‘rainy day’ - what the rest of the world calls a slush fund.
    “We can sum this up with the mnemonic Less Knowledge Yielded by Scheming Plutocratic Politicians (easy to remember if you just think of the Lee Kuan Yew School of Public Policy).”

    By tk on Jun 24, 2010

  5. In the U.S., there is very little media coverage of Singapore. Perhaps the government of Singapore is not providing accurate information to its people. I think a law should be passed to require an independent audit of the government so that the people have more reliable and truthful information about the government’s activities. Without accountability, the government is not answerable to the people, and thus has no legitimacy.

    By psykomyko on Jun 24, 2010

  6. well I read the article and now I have a headache trying to actually understand what was written ? Do these people try to confuse on prupose, does anyone really know what the prof. means here other than bafflegab ?

    By sluggo on Jun 25, 2010

  7. I think what this guy is trying to do is to impress everyone with his “finance speak” - the same bullsh*t Wall Steet did as they sold mortgage derivatives as actual mutual funds. In other words - it is a wankfest! The only good thing about this article is that I get a link to some cool music!

    By Wingtouring on Jun 25, 2010

  8. He is saying the Singapore’s debt calculation does not take into account their budget surplus, and that said surplus is not being applied to pay down the debt. So, based on the calculation of gross public debt it appears that Singapore’s economy is more unstable than it actually is. He then goes on to explain how the debt has been issued (bonds and T-bills) and who is holding the debt (which companies have purchased the bonds and T-bills as an investment vehicle.) Finally he concludes that traditional calculations are not a good way to determine Singapore’s overall fiscal health because they don’t take into account the specific way in which Singapore manages public assets and liabilities. And I don’t think he’s wanking, I think he’s just speaking in economist-speak. I think an economist reading this would not be confused by the language he is using.

    By mrslaughter on Jun 25, 2010

  9. Singapore’s debt and hidden surplus reveal an economy based on mistrust of any financial stability. Rightfully so. Once surplus is revealed, many leaches will want to grab hold and suck it dry, thereby causing financial instability. It may not be the best way to do it, but it is one way.

    By SpeedwayBoogie on Jun 25, 2010

  10. In plain speak, the writer believes $ingapore ain’t broke and the writer believes it don’t need fixin!

    By Adam Dean on Jun 26, 2010

  11. I guess I’d have to be convinced that any info from the CIA in USA is accurate. After all this country is ruled currently by Obama and his packrat Pelosi. The only thing Obama knows how to do is lie.

    By phil winans on Jun 26, 2010

  12. Living in the USA (but born in the UK), I am surprised about how little Singapore or any other country is heard about in the News over here. From the article, it appears Singapore is in better financial health than the US - although they appear to be hiding the fact. Well, I think that was what the article said!

    By Red Dragon on Jun 26, 2010

  13. Well, I don´t understand anything the professor wrote, but sure it reminds me my country´s government tying to explain why taxes reach the sky in Brazil.

    By Belasco on Jun 26, 2010

  14. My best reading of what he is saying is that different government authorities or agencies, such as the CPF (for my fellow Americans, that’s more or less the equivalent of Social Security) have debt for various reasons. Therefore, he’s saying, there’s a fairly high total of debt for the SG government, but that doesn’t take into account that other parts of the government have surpluses, so that if you take everything into account, SG is in the black even though it has debt. He’s arguing that the overall picture is the more important thing.

    What he doesn’t really address is why the overall picture is more important. One is left to presume that the government could, if needed, take the surpluses to pay the debt off, but I don’t know enough about the situation to know if there are potential problems there.

    By Brett Alan on Jun 26, 2010

  15. Its basically the government not showing fiscal responsibility and this keeps those on the lower economic scale down while allowing those in a richer bracket to prosper. they are doing what many third world countries are doing

    By Walter O on Jun 26, 2010

  16. I think the rulers of Singapore are aggressively protecting their country by, 1) not showing the world and their public how much money they have. 2) showing a loss for the year which was real and not using left over funds to disguise it. and 3)using their past surplus monies to cover current deficits without claiming a false profit or financial situation. I think they are smart

    By Richard Ridderbusch on Jul 1, 2010

  17. As several others have pointed out, there are many sources for income and that Singapore’s “public” budget reflects the income for that year. Is it an attempt to hide their true holdings? I will leave that speculation for Singapore’s citizens.

    By NAMoosedog on Jul 6, 2010

  18. “Conventional aggregate ratios to assess fiscal health have important limitations,” professor Asher writes. “Suitable changes in the way the government presents its fiscal accounts could enable analysts to better assess $ingapore’s fiscal health.”

    That’s professorial double-talk for, “Our current financial systems don’t work. We won’t know how bad our fiscal situation is until we use a more reliable accounting method.” Being an expert is writing lengthy essays that say nothing, Asher does not offer a solution to the problem.

    - -
    “Art will always be Art.” - Goethe

    By bowman on Jul 17, 2010

  19. In Singapore,as in most Western countries, the ‘money’ is not in the public domain. It’s held - well out of the reach of joe public, so that the rich become richer while the poor become poorer.
    Because the media is ‘controlled’ we’re all suckered into believing that ‘debt’ is worldwide - b******t. As Bowman states the financial systems dont work (unless you control the flow of money).

    By John Mclaughlin on Jul 27, 2010

  20. What he was saying that it was George Bush’s fault and that Sarah Palin was satan’s spawn.

    By Garu on Jan 15, 2011

  21. to me all politics is a matter of corruption or lobbyism.

    By peter on Jan 15, 2011

  22. where does all the money go,is it real money?

    By paul on Jan 15, 2011

  23. The fix is in.

    By Isotope on Jan 15, 2011

  24. TK has the best interpretation. Why show your cards, even to your own people. Many businesses find an advantage in showing a marginal or negative balance sheet. The author seems to be pulling back the curtain just enough to reveal the wizard behind it.

    By Frank on Jan 15, 2011

  25. Who’s got the money versus ” WE all know who ain’t got it” and “don’t look now, it ain’t me or you”. Yes, it’s easy to identify the problem,
    but how to fix it? I’m not from Singapore, so I don’t know what happens when folks begin to ask
    serious questions…….

    By coyoti on Jan 15, 2011

  26. Is the esteemed professor implying that Singapore’s politicians are corrupt?
    Jesse Ventura compares America’s Congress to the World Wrestling Federation - arguments and bitter disputes in front of the TV camera while backstage they’re all having a beer together…

    By TDC on Jan 15, 2011

  27. I believe that ultimately the bottom line expressed is that the country’s roughshod reporting methods on their fiscal position gives the impression that it has been compromised and mis-managed.

    By Brian on Jan 16, 2011

  28. debt & deficit are not the same thing, your credit card bill at any given moment could show you are in debt, even if you are within your credit limit & intend to pay it off at the end of the month. If you can’t pay, even just interest, that’s the problem. Singapore is good for it’s money hence why no one is bothered about it’s percieved debt.

    By Liam NSW on Jan 16, 2011

  29. I found the article quite interesting ,,,But every country in is massive debt with this dreadful Capitalist system

    By ian Crisp on Jan 16, 2011

  30. Very very interesting this article!
    Excellent :-)

    By Rochacrimson on Jan 18, 2011

  31. I still think the fix is in. And the link is . . . .

    By Isotope on Jan 18, 2011

  32. I read this last June and it made my brain hurt. I still have no opinion but in the US we are going to save the economy by taking benefits from the poor. No cost of living raise for those on Social Security because there has been no inflation. Cut back on Medicare and Medicaid. In California Medical has dropped vision and dental.
    The rich think the poor are taking their money.
    Actually the poor put every dollar they make back into the economy.When it reaches the top it becomes stagnant.

    By Sking on Jan 19, 2011

  33. Unfortunately, each of the various areas of expertise in the world (especially in science, which financials are part of) has developed its own language that is mostly incomprehensible to the everyone outside the area. Unless one takes the time to become immersed in the financial world, there is no way to understand it. This is why it was so easy for the powers that be on Wall Street to screw the rest of us and get away with it. With regard to Singapore, who cares?

    By Cluffernutter on Jan 22, 2011


    By king69 on Jan 24, 2011

  35. Taxation is a very unfair way to collect money from the masses in order to pay debts generated by other people. There must be another way……….

    By Daij on Jan 29, 2011

  36. ….. perhaps by making those responsible for creating the debt responsible for clearing it!

    By Daij on Jan 29, 2011


    By Terry on Feb 13, 2011

  38. Years ago the trade union movement were accused of trying destroy the economy, now we have the bankers doing it and gloating about it as well. Do the governments object too strongly? NO. Could this be anything to do with the money donated by banks to election campaigns or am I just being a cynic?

    By sebrof on Feb 14, 2011

  39. It seems even developed countries like the US, Singapore are in for crash in economy….but not like in the Philippines where the money is put in their own pocket…

    By Melchor C. Bautista on Feb 15, 2011

  40. Singapore and the USA are living like fat cats letting the third world countrues carry the load, and make all of the the money. I would hazard a bet that China holds most of singapore’s debts. We will all be owned by the Chinese soon. Seems like a matter of time.

    By JN on Feb 17, 2011

  41. 2 words - SLUSH FUND.

    By Skeletor on Feb 24, 2011

  42. Could it be that the Government is padding it’s bed with the monies better spent on social reform and infrastructure? Most probably so. Sad to say that the same goes on here in the “transparency of the politic” that’s become America.

    By John P McNea III on Feb 25, 2011

  43. Americans should be concerned with working on their own problems and leave other country’s budgetary deficits to them. Besides, I think it all has to do with the way they crunch their numbers.

    By goldminer on Mar 9, 2011

  44. I have to agree I can’t remember the last time Singapore showed up in US news. It makes learning anything about the country or its finances very vauge

    By Keith on Mar 18, 2011

  45. debt & deficit are two different things, debt is fine if you have the resources to fund it. i am $2k in “debt” on my Amex, not a problem though, even without the next paypacket, i can cover it.

    By Liam NSW on Mar 22, 2011

  46. Ok.

    By Rijn B on Mar 23, 2011

  47. The Jamaicans call it politricks, the shadow world of created “truth” by government. They make a house of smoke and move in.

    By Patrick Edmondson on Aug 1, 2011

  48. i think many countries would like to be based on the singapore model right now..

    By Liam NSW on Sep 13, 2011

  49. Siamo rovinati

    By gagliaudo on Oct 20, 2011

  50. My late father always said ‘It does not matter who you vote for, the Government always get in’

    By Jack on Dec 15, 2011

  51. ?

    By Dave on Jan 26, 2012

  52. Too bad the music industry doesn’t care about content and artist royalties, as much as it care about steeling privately recorded propriety

    By domack on Feb 8, 2012

  53. are we going to copyright everything you say and do next?

    By Gaucho on Mar 9, 2012

  54. ??

    By Dave on Apr 7, 2012

  55. I am aware of the trend toward globalization of “everything” including OPP-Other People’s Problems-don’t we already have enough domestic conundra(?) to occupy the concerned citizen portions of our collective consciousness? Therefore, at the risk of being derided as a self-interested capitalist,unless these debt problems affect the U.S. economy- feel free to educate me on this point,those of you who got higher than a “C” in economics- I simply say this: Unless I live,work or have loved ones or business interests in Singapore, (which I do not), to quote Pete Townshend “Why should I care? “

    By vic on Apr 18, 2012

  56. What is going on here is the military/industrial complex is STEALING all of the money from countries that participate in war creation. The U.S. is bankrupt because the bush crime family STOLE all of our money and gave it to criminal cabals like Haliburton. I hope the entire bush crime family and that scum bag cheney burn in hell.

    By nobsartist on Apr 22, 2012

  57. I really am not sure exactly what he is saying?

    By Bob on Apr 24, 2012

  58. don’t even try blaming bush for all this.There is corruption in every conflict.
    We should go back and get this lbj feller now for escalating the Vietnam war.Case closed

    By matt_the_cat on May 16, 2012

  59. All you can do is vote third party if you are not in a safe State, yes, I believe even given Obama’s terrible performance, things can always be worse. You could stick your hand in the garbage disposal! Now, will somebody tell me how to download “Smoke Signal” from the “Rock Of Ages” outtakes!

    By Greg Wall on Jun 5, 2012

  60. greg, you need have academy of outtakes, it can be found on there.
    I `d like to help you out but don`t want to post my email address here.If you feel okay about it post yours and i`ll get in touch with you.

    By sluggo on Jun 7, 2012

  61. the problem is everybody just got too greedy

    By whdup on Aug 17, 2012

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