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The SDP cautioned Singaporeans against electing Dr Tony Tan as President of Singapore because Dr Tan is very much a part of the system designed to shield the financial reserves from the people’s scrutiny, in particular the operations of the GIC (see here and here).
Dr Tan was at the helm as deputy chairman of the GIC when disastrous decisions were made to invest in financial institutions in the US and Europe. Singaporeans have short memory but that was a time when our financial security was hanging by a thread.
The GIC had cut its losses then and announced that it had lost $70 billion of our hard-earned savings. That’s $23,000 for each and every Singaporean.
It could have been worse – much worse. As it turned out, it wasn’t the smarts of Dr Tony and those in the GIC that saved the day. The fund was at the mercy of the banks in America. We were completely helpless to do anything as the meltdown in Wall Street occured in 2008.
It was Barack Obama that came to GIC’s rescue. The US President ordered the printing of huge amounts of money to pump into the banks in order to prevent their collapse. The Troubled Assets Relief Program (TARP) injected capital into financial institutions like Bank of America, American Insurance Group, and Citigroup to keep them afloat.
Their collapse would surely have crippled both the GIC and Temasek Holdings from which recovery would have been extremely difficult. Where would our CPF savings have gone then? Not only have we placed all our proverbial eggs in one basket but we have also done it without any control and oversight of those managing our reserves.
The 2008 financial crisis should have taught us an important lesson. Unfortunately, it hasn’t. Dr Tony Tan as our next president defies common sense.
Worryingly, the 2008 calamity may not yet be over. Its consequences have caused the global financial system to become less, not more, stable. The TARP money that was pumped out has not been able to prevent economic troubles in Europe and the US – a development that has affected other economies including China. It may signal another round of financial chaos. Again the GIC and Temasek will be caught up in the madness.
Yet we are no closer to knowing what is happening to our reserves. We have no control over them. At a time when we most need transparency and accountability, we end up with a GIC man as our President. That about sums it up.
Let us hope that we will not live to regret the decision.