President S R Nathan said recently that the recent recession, in which the government for the first time sought his office’s approval to draw on reserves, has validated the need for Singapore to have strong national reserves.
He must be talking of the S$4.9bn that was used to fund the government budget in 2009 and which has since been returned.
Juz taking into account the monies managed by GIC, and Temasek’s funds, our reserves then were at least S$470.3bn. This means that only 1% were used to fund the recession budget.
Do we need such massive reserves when we draw-down so little, given that the reserves are not the result of nature’s bounty but of the people’s savings.