Unlocking reserves

Well whoop-di-do! President Nathan has come out to explain why he agreed to use his key to the reserves. According to Nathan, he was convinced of the severity of the economic situation, both global and local, after meetings with the Finance Minister, Trade and Industry Minister and the Prime Minister.

 

“I recognize the importance of giving confidence to go ahead with the measures proposed in the Budget for the particular reference to past reserves bearing in mind (that) if the situation worsens, negative consequences would have kicked in, making any measures too late to be of any effect” he said [Straits Times, 18 Feb 2009].

 

However, to my mind, the decision to unlock our past reserves must be made on two arguments: The first is, is the President satisfied that there a need to do so? And quite clearly, with record job losses and financial woes on the cards, there is that need. Second, is the President satisfied and confident that the government of the day has the right solutions to the worsening economic situation?

 

So far, only the first part is clear: the government coming to the President with a case to unlock the reserves. The government obviously painted a gloomy scenario, gloomy enough to perk Nathan into turning the key. To be fair, the gloomy economic scenario is everywhere in every international paper so it’s hard to blame him for fearing the worse.

 

But what about the second part: how does the President know that the government will put the money to good use? This is where things get a little ambiguous. How confident was the President in the Job Credit scheme and the Special Risk Sharing Initiative? According to TODAY, “The President reiterated that he was not here to judge whether these schemes would ultimately work, though he would certainly say no to “scatter-brained” proposals” [TODAY, 18 Feb 2009].

 

Not here to judge? Shouldn’t the man responsible for giving the government our money make it a point to judge if the money will be well spent?

 

Another worrisome reply came when asked what would happen if there was a need to draw even further on reserves should the Job Credit scheme be extended after a year. “It all depends on what happens. So that was not a consideration in our minds”. [Straits Times, 18 Feb 2008]. In other words, we may dig deeper into the reserves… who knows, we didn’t dwell on it.

 

So what did this exercise tell us? Several things.

 

Firstly, there are no institutional procedures when it comes to unlocking the reserves. Just a series of informal meetings and the ability to convince one man. This is why someone close to government is needed.

 

Secondly, the press conference came across as a tad defensive. Instead of celebrating how the Elected Presidency had been operationalised succesfully as an institution, Nathan seemed to be more concerned with emphasising how urgent the situation was and how the government needed the money. Could this defensiveness been a result of criticisms from the internet forums and blogs? 

 

Thirdly, why did the President hold a press conference even though he was not obliged to so (as he made clear to the reporters)? To explain himself? He could have done this through Parliament in a written reply, together with his written consent to unlock the reserves. He chose to hold a press conference because the Elected Presidency, as an institution, could do with more moral legitimacy. There have been no presidential elections since the late Ong Teng Cheong and without elections, an Elected President cannot claim to have a mandate or moral authority. A press conference offers a means to address the public in a more intimate and direct way, unlike the impersonal mechanism of Parliament. He was seeking public approval.