Wednesday, July 11, 2012

Pledge to the IMF

7 July 2012 

Forum Page
Straits Times

Article 144 of the constitution of Singapore states, "No guarantee or loan shall be given or raised by the Government except under the authority of any resolution of Parliament with which the President concurs".

The meaning of this article seems to be quite clear to me. In my view, the pledge of US $4 billion to the International Monetary Fund constitutes a guarantee that is covered by this article. If the pledge is called by the IMF, the Government will have to grant a loan which is also clearly covered under this article.

I am. therefore, amazed by the arguments put forward by the Monetary Authority of Singapore that the pledge given to the IMF, as it now stands, did not breach the Constitution. If the position of MAS is correct, it is better for the Constitution to be re-written to reflect the position taken by MAS.

The Constitution is perhaps the most important legal document in the land. The citizens should be assured that they can trust the Constitution to mean what it says, and that the wordings are not interpreted in a manner that defy logic or common sense.

I do not understand why the pledge of this large amount is not submitted for approval by required under the Constitution. Even if there is an urgency for the pledge to be given, it can be given on a provisional basis, and be subject to obtaining the required approvals. I believe that most countries would follow such a process on a matter of great importance. This would reflect a high standard of governance, which is what the Government aims to promote in the corporate world.

Rather than justify an action that is already done, I suggest that the MAS should submit the pledge to Parliament for rectification by Parliament and the President. It is all right to make a mistake and to learn from it.

Tan Kin Lian


yujuan said...

As part of the world community, Singapore should and must contribute to the IMF in the form of loans, we citizens are aware of this obligation.
A small country like Singapore, US4b is a large sum of our Reserves, if the billions taken out to help citizens tide over difficult times, have to obtain Parliament and the President's approval, why this IMF Fund contribution is not obliged to.
Then future rogue Govts could copycat the same, and the possibility of squandering our Reserves on botched investments, or worse, siphoning off billions abroad is scaring.
A precedent should not be permitted to set. Spending on citizens or loans to IMF is sama sama, both touch on the Reserves.
What if the world Economy collapses, and borrowers' bailout have to be pardoned, then IMF has to approach us for further contributions, and the merry go round would have no ending.
If the Constitution has loopholes, then make changes, it's not like the 10 Commandments of God, cast in stone. Anything man made could be changed, and/or adjusted.

Lye Khuen Way said...

Mr Tan, I seriously doubt that ST will publish your letter, as-is.

All right thinking student of English will share the same view as youself, but alas we seems to have been neglecting the study of English Grammar for so long in our school, that our Uniquely Singlish syntax must have taken root right here in our country, once a Crown Colony.

Anonymous said...

Dictionaries define a "pledge" as a solemn promise.

Not an aspiration.

In fact, a pledge sounds more like a guarantee according to some dictionaries. See sample below.

a solemn promise or agreement to do or refrain from doing something: a pledge of aid; a pledge not to wage war.

something delivered as security for the payment of a debt or fulfillment of a promise, and subject to forfeiture on failure to pay or fulfill the promise.

the state of being given or held as security: to put a thing in pledge.

Law .
the act of delivering goods, property, etc., to another for security.
the resulting legal relationship.

something given or regarded as a security.


Xianlong said...

Reform party due to their exodus of members didn't leave a favorable impression on many. Nevertheless i still voted for them.

We need people like KJ to raise issues else many including myself won't know of legality of such loans under the constitution.

Some people ask for track record of new party. Well when allies invaded north africa during WWII, the troops have no track record.

When allies decide to form 8th air force, its pilots have no battle proven track record either.

When allies invaded normandy's bloodiest beach of Omaha, the soldiers have no track record either.

People ought not be so fixated on track record. Vote the loyal opposition in & they will have a chance to work on their track record.

Tan Kin Lian said...

I saw the following explanations published in a website that looked quite "official",

a) The pledge is made by MAS and not the Government

b) The loan is an investment by MAS, similar to other types of investments.

I tried to locate this website, but is not able to do so. So, I am just recalling from memory.

I find both arguments to be flawed. MAS is an agency of the Government and is NOT independent of the Government.

There is a difference between a loan made in the ordinary course of business, and is subject to the usual evaluation, and a pledge to the IMF to be used to help countries in crisis. The latter is more risky - other wise IMF could have raised the funds in the normal course of business.

I find these explanations to be quite unacceptable.

Anonymous said...

MAS is not independent of the Government. As a MD of MAS, if you perform well e.g. follow instructions and contain problem like the MiniBond crisis in 2008, you will be promoted to be a Minister in Education. Mind you, containment at the expense of the Singaporean retail investors. Hong Kong Regulator did a better job while paid much less....

Anonymous said...

Seems like the govt couldn't care less and totally boh hew the criticisms. Otherwise even as a wayang of respect to the ordinary citizens, the least the govt can do is to go thru motion of rubber-stamping in parliament.

Anonymous said...

Let them adopt such attitudes of "boh chap"

This is their weakness.
The attitude of authority and "I know best"

Let them continue, meanwhile we do not highlight these weaknesses.
However we must not drop our vigilance on their actions.

With so many bloggers collecting data and information, we should spread the news far and wide.

We will bid out time for the next GE.

Meanwhile, please do not be so nice and helpfull providing such feedback about "they should" and "they should"... we are only giving them ideas.

Silence is a very effective strategy.. it strikes fear in people with lots of conscience.

Be patient.

Anonymous said...

Please don't question President authority. This position is not design to question the cabinet but to sign on the dotted line whenever the cabinet recommends. That's $1.54 million dollar a year. The last president drew $3.5 million a year for 10 years. Shiok right? Even our part-time MPs know the maths. Only $15,000 a month, why attend Parliament? Better spend more time in full-time job.

Anonymous said...

rex comments as follows,

although the usage of this $4,000,000,000 of taxpayers money is a very serious issue, i am very very puzzled why the other two ex President wannabe;s are completely silent. Are they serious about "safeguarding reserves" when they have utterly zero comments on this matter now that an issue has propped up?
Equally surprising the WP and even SDP is COMPLETELY QUIET ON THIS MATTER. what's happening?


Anonymous said...

When I was young, whenever I hear the word Parliament, my impression is our Ex-PM LKY is the boss. He is always there to educate the public how important is the Parliament, MPs and Ministers to our country. How important to vote for and ensure good and honest TALENT be send into the Parliament. This recent decade, when I hear the word Parliament, I don't know who is the boss? Ex-PM LKY is already 87, has done enough and should need his rest. Hope his aids are doing a good job keeping this piece of news from him as it would get him very angry. How come his majority PAP MPs have better things to do then attending the parliament. Maybe PM Lee should consider getting MPs to work full time as I think the $15,000 a month allowance is actually $180,000 a year which most full-time Singaporean are already finding it hard to get $24,000 a year full time job....

Anonymous said...

From the website:

"The President’s veto powers over the Government are focused on specific areas:
(a) Protection of past reserves, i.e. reserves accumulated during previous terms of office of Government;
(b) Appointment of key personnel; and
(c) ISA detentions, CPIB investigations and any restraining order in connection with the maintenance of religious harmony.

On all other matters, under the Constitution, the President must act in accordance with the advice of the Cabinet. In addition, the President is required to consult the Council of Presidential Advisers (CPA) when exercising his veto powers in connection with reserves and appointments.

Anonymous said...

All these years, I always felt our President is the best retirement job in the world. They are always smiling. It really brings home the meaning of "laughing all the way to the bank" The current is drawing $128,000 a month while the previous drew $333,000 a month for the last 10 years. It takes alot of courage, intelligence, confident and integrity to convince oneself that he deserve the 6 figures salary while drawing $10,000 a month is a dream for many people. I also wonder whether this salary match the position or match the work it is doing? 333,000-128,000 = 205,000 is the overpaid amount per month for the last President position. I watched the show Nelson Mandela and in one scene, he honestly think that he is overpaid. I wonder whether our Presidents felt the same way?

Anonymous said...

Why PAP Govt can lend to IMF is known as Financial Engineering. Same trick used in 2008 financial crisis in USA with lots of tricks and beautiful words like CDO, Credit swop etc. For our case is confusing "borrow" and "lend", "boorrower" and "lender". Basically, twisting the meaning all over the place so that's no need to seek parliament or President approval. Maybe also because since the President cannot say "No" and being new to the job, Cabinet don't want to get him in trouble to explain why so easy say "yes" all the time. So the decision to "Self approve". Good thing, Singaporeans are not stupid even though we know that Parliament and President will approve if approval is needed.

Anonymous said...

I think most PAP supporters cannot comprehend the need of Kenneth J to persue this matter.

So what if Govt seek approval? PAP nominated Parliament & PAP President will sign off without any questions ask.

This is precisely the same reasoning why Ministers' dream-team & President's salary increase lasted from 1994 to 2011.

As long as PAP govt propose something, Parliament & President will follow through and do the "P-A-P" thing --> Propose-Approve-Party...."

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