Tomorrow, September 1, Singapore will elect a new president with custodial powers to safeguard the nation’s trillion-dollar financial reserves and oversee key appointments to institutions like MAS, GIC and Temasek. The election has attracted an eclectic pool of candidates, each bringing unique experience and perspectives to the fore.
At the forefront is Tharman Shanmugaratnam, 66, a prominent figure in Singapore politics and finance. With a wealth of experience as a former finance minister, central banker, and until recently Senior Minister in the government, his candidacy resonates with his adept handling of economic and social matters. Highly respected internationally, he was the first Asian chairman of the International Monetary Financial Committee, and currently chairs the Board of Trustees for the Group of Thirty, a global body of economic and financial leaders from the public and private sectors and academia.
Another contender, retired CIO of GIC Ng Kok Song, who is 75, brings a formidable financial background to the race. Ng's experience spans over four decades, including a 15-year stint at central bank MAS, during which he navigated complex investment challenges and several global financial crises.
Tan Kin Lian, also 75, a former insurance company CEO, completes this eclectic trio. His extensive experience in the financial sector, coupled with his reputation for steering homegrown NTUC Income's exponential growth, underscores his potential impact in this election. Backed by prominent opposition politicians, Tan's candidacy is also viewed as an attractive alternative for the anti-establishment vote.
Central to the discourse of this election is the utilization of Singapore's reserves. Between 2020 and 2022, the government withdrew c. US$ 30 billion from its past reserves to combat the economic impact of Covid. The judicious management of these funds is a key topic in this election, particularly given the significant combined reserves of MAS, GIC, and Temasek, which stand at an estimated US$ 1.3 trillion – a remarkable sum for a small city-state with no natural resources and a population of only 5.6 million. GIC does not disclose the value of the assets it manages although Global SWF estimates it to be about US$ 769 billion. Temasek’s net portfolio value stands at US$ 287 billion, while MAS’ official financial reserves are about US$ 331 billion as of June this year.
The Elected Presidency in Singapore is meticulously designed to prevent misuse of the nation's hard-earned financial resources by a rogue government. Any drawdown on past reserves must receive the president’s consent. Presidential candidates are required to meet stringent eligibility criteria, including having held senior positions in either the public or private sector with substantial capital management experience. Among those who may be eligible to stand for election are government ministers, chief justices, accountant-generals, or chief executives managing companies of at least US$ 370 million in share capital.
In the lead-up to the presidential election, public sentiment has been stirred by a succession of negative reports. The initial blow came from MAS, which disclosed a net loss of US$ 22.8 billion in early July - its most substantial loss to date - attributing it to stringent inflation-controlling monetary measures. Temasek followed suit, reporting a US$ 5.3 billion loss in the last fiscal year due to the turbulence in capital markets. Adding to the challenging climate, GIC marked its poorest five-year nominal returns of 3.7% since 2016, grappling with the global decline in stocks and bonds. Despite the setbacks, GIC and Temasek continue to be aggressive investors, ranking consistently among the most active global sovereign investors.
As the candidates vie for the presidency, they underscore their financial acumen, political independence, and dedication to the nation's welfare. Shanmugaratnam, with his comprehensive understanding of reserve safeguarding, Ng with his unparalleled investment expertise, and Tan with his commitment to holding the government accountable for the use of the reserves.
Shanmugaratnam, who was finance minister between 2007 and 2015 and until recently MAS chairman and GIC deputy chairman, said: “I know the whole system of safeguarding and using reserves inside out, no one can fool me.”
Ng said his “non-partisan” status would help him discharge his duties without fear or favor, a barb clearly directed at his rival, whose candidacy is widely perceived to be endorsed by the government. Shortly after his retirement, Ng launched Avanda Investment Management in 2015 with assets of about US$ 4 billion, reportedly with the support of GIC, Temasek, and other institutional investors. The firm has since more than doubled its assets to about US$ 10 billion.
Aside from veto powers over the drawdown on past reserves, the president also has discretionary powers under the Constitution to block the appointment and removal of key public officeholders if he has sound reasons. These positions include the Chief Justice, Attorney-General, Defence Chief, and Police Commissioner as well as the heads of government entities such as MAS, GIC, and Temasek.
In a nation with rising presidential expectations, the election's outcome will profoundly shape Singapore's path ahead. The victor will shoulder the responsibility of securing the nation's financial future while adeptly handling a multifunction role spanning economics, social cohesion, and diplomacy. The winner emerging this Friday will have his work cut out.
Edward Tang is Global SWF’s Head of Asia, based in Singapore. Prior to joining Global SWF, he had a diverse career spanning multiple industries, including the Singapore Foreign Service, journalism, media advertising, and business development. He spent several years in journalism with the Straits Times and, more recently, with the AsianInvestor, where he covered institutional investors across Asia-Pacific.