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As major changes emerge in the effort to resuscitate the battered world economy following the recent G-20 summit in London Singapore, together with other tax havens, has been put on notice to clean up its banking and financial sector.
“We have agreed that there will be an end to tax havens that do not transfer information upon request,” said the host British Prime Minister Gordon Brown at the end of the summit. “The banking secrecy of the past must come to an end.”
The Organization for Economic Co-operation and Development (OECD) has identified Singapore as one of the territories that “have committed to the internationally agreed tax standard, but have not yet substantially implemented” the measures.
OECD Secretary-General Angel Gurria said:”We now have an ambitious agenda, that the OECD is well placed to deliver on…I am confident that we can turn these new commitments into concrete actions to strengthen the integrity and transparency of the financial system.”
In response, the Government has quickly moved to assure the OECD that it “intends to implement the standard by effecting legislative amendments later this year.” (See Singapore vows to change tax laws to remove havens)
Morality and money
Within the short period when Dr Chee Soon Juan first raised the issue of Singapore’s banking industry where the wealthiest of the wealthy are attracted with banking laws designed to provide utmost secrecy, the fate of Singapore’s future as a financial centre has taken a dramatic turn.
But how does the move away from being a tax haven benefit Singaporeans? Should one care about morality when there is money to be made? Why are the Singapore Democrats so concerned about Singapore becoming a secrecy jurisdiction?
The era where business claims amorality is over. The laissez-faire attitude towards the rich in recent decades and how they make their dollars have resulted in misery being brought upon the common folk.
Just ask those who lost their life savings over the financial rubbish that they bought from the now-defunct Lehman Brothers. It was precisely the lack of moral underpinnings that allowed the rich to exploit the masses by selling them these dud products.
What about the bankers in Wall Street? Already millionaires many times over, these people were still scheming to make even more money by generating fraudulent financial products that eventually became toxic assets. This proved to be the undoing of the world’s economic system.
The one ingredient that was missing in all the rush to make money: moral principles.
Losing the way
In Singapore, the opposition must be ever-vigilant about where the PAP is taking us. Tax havens, while a lucrative enterprise as long as no one questioned the morality (not to mention the soundness) of the practice, is neither good business nor smart strategy. It is a get-rich-quick scheme that is destined to fail.
Building a financial industry on such a shady and shaky premise will open us to backlash that no one can predict.
Singapore has seen in recent years the influx of unaccounted money, aggressive promotion of hedge funds, and the trading in highly volatile derivatives and toxic financial products. We have also witnessed the mushrooming of millionaires and billionaires, mostly foreigners, with an insatiable appetite for ultra-luxurious properties and recreational facilities in exclusive areas, including integrated resorts with casinos.
All this has driven up the cost of living for Singaporeans who continue to struggle in one of the most expensive cities in the world.
It is clear the PAP has lost its way. With the world financial and economic undergoing a fundamental shift in the way it operates, we need a new model upon which to build our future. That model is one based on transparency and accountability, one where the people come first.