Public debt: US$70k per Singaporean?

~by: Leong Sze Hian~

According to the Economist’s global debt clock (see HERE), Singapore’s public debt is US$214 billion, public debt per person is US$42,265, public debt as percentage of GDP is 102.8 per cent and the total annual debt change is 8.2 per cent.

Actually, the public debt per Singaporeans is higher at about US$70,000, because the Economist calculated its figure based on the total population of 5,068,219 which include about 40 per cent of non-Singaporeans.

Owe a 2-room HDB to every man, woman and child?

Using HDB as a yardstick, US$70,000 (S$84,604) per Singaporean of public debt is like owing a new 2-room HDB flat to each man, woman and child.

The United States, which has the largest public debt in the world, in contrast, has a public debt per person of US$28,775, which is less than half of Singapore’s. And Hong Kong and Malaysia’s public debt per person is only US$7,877 and US$4,136.

Why is our public debt per Singaporean about nine and 17 times more than Hong Kong and Malaysia, respectively?

How much reserves?

Since the total reserves of Singapore is not known, what is the total reserves less the public debt?

As the key reason for establishing the office of the Presidency was to guard the reserves, perhaps these questions may be answered in the future.

Central Provident Fund

As the bulk of our public debt is due to issuing non-marketable government bonds to the Central Provident Fund (CPF) Board, in exchange for CPF funds at the interest rates paid for the various CPF account types, Singapore may actually be in a very strong financial situation, as we hardly have any external debt.

However, the public debt may be problematic, if we decide to pay higher rates of interest on CPF funds, such as Malaysia’s Employee Provident Fund (EPF) which pays actual returns of the fund every year, or if we decide to allow CPF withdrawals at earlier ages, or lower CPF Minimum Sums withheld until age 65 and beyond.

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