Did Singapore really grow richer by S$235 billion?
Critical Spectator first claimed this in an article, titled ‘Singapore is richer by over S$200b thanks to COVID-19, as Temasek announces record returns‘, which was published by Vulcan Post on 14 July.
Singaporean blogger Pat Low disagreed and refuted the Critical Spectator’s claims, noting that such claims are “hogwash”.
In response to TOC’s mention of Pat Low’s blog, Critical Spectator took to its Facebook to re-emphasise that Singapore has indeed gotten that much richer.
In fact, it stated that the sum could even be higher as GIC profits have not been included, and the Net International Investment Position shows an increase of S$350 billion.
For those who are unaware, Critical Spectator is a commentary blog which is run by a Polish national named Michael Petraeus. He gained national recognition sometime in late 2018 and 2019 due to his series of posts that were somewhat deemed as pro-government.
While his early posts discussed issues like Brexit, China’s work culture, and US politics, Mr Petraeus later on became critical of Malaysia’s former Prime Minister, Dr Mahathir Mohamad.
His commentaries also painted Singapore in a positive manner, causing many to question his motivation.
Blogger Pat Low once again challenges Critical Spectator’s claim
Following Critical Spectator’s second claim, Pat Low has published a new blog post on Sunday (25 July) to once again challenge such assertions.
In his latest blog post, titled ‘AGAIN, DID SINGAPORE GROW RICHER BY S$235B DURING THE PANDEMIC?‘, Pat Low explained in some detail the mechanics of capital flows and how the Monetary Authority of Singapore (MAS) manages exchange rates and liquidity.
It makes for an interesting read and understanding as to why he is of the view that Critical Spectator’s claim that Singapore has grown so much richer is untrue.
Pat Low also made several point-by-point rebuttals of the explanations by Critical Spectator, as illustrated below:
- The initial claim was the increase of S$160b in the Official Foreign Reserves (OFR) is gains in foreign reserves by MAS. As explained, the purchase of foreign currencies by MAS when it intervenes in the market are all sterilised and thus funded by debt in the form of MAS bills and notes. Singapore didn’t grow richer from this.
- There’s also the claim that Singapore grew richer by S$75b due to increase in Temasek’s portfolio is also wrong. Increase in wealth is seen in the profits of Temasek or increase in net worth. Profits in 2021 was S$56.5b. Of course, this is a massive profit, even though 83% of it came from mark-to-market gains of sub-20% holdings.
- Then in Critical Spectator’s second post, the idea of Net International Investments Position (NIIP) increasing by S$350b was brought in to suggest that the whole country gained by a huge amount. Once again, this is wrong because domestic liabilities of resident entities are not known. At least, Critical Spectator recognises now that this is country data, not national. There are about 37,400 international companies in Singapore, and one million foreigners residing here. Taking this out of the equation, I wonder how much of the S$350b left is for Singaporeans. Out of this, take out those that belong to local companies and private individuals, one can only wonder how much is left for the state or the public.
For the full scope, head over to Pat Low’s latest blog.
