Such debt levels would instinctively seem to be excessive and be associated with countries with questionable approaches to economic and fiscal management. However, Singapore is widely regarded as a governance and economic success story. What should we conclude.. is it an exception or is there something we’re not being told about Singapore ?
Yeah, I should have clarified that. Thanks for bringing it up, Jeff. So, yes, Singapore's government does borrow a lot. But that's not because it needs to cover expenses, but to invest in assets abroad through its big investment funds like GIC and Temasek Holdings. This way, their debt isn't really debt but more like an investment tool. So, if you look at their balance sheet, their financial assets are always much greater than their debt. The reason is that Singapore almost always runs a budget surplus, and its constitution doesn't allow borrowing to pay for current spending.
Such debt levels would instinctively seem to be excessive and be associated with countries with questionable approaches to economic and fiscal management. However, Singapore is widely regarded as a governance and economic success story. What should we conclude.. is it an exception or is there something we’re not being told about Singapore ?
Yeah, I should have clarified that. Thanks for bringing it up, Jeff. So, yes, Singapore's government does borrow a lot. But that's not because it needs to cover expenses, but to invest in assets abroad through its big investment funds like GIC and Temasek Holdings. This way, their debt isn't really debt but more like an investment tool. So, if you look at their balance sheet, their financial assets are always much greater than their debt. The reason is that Singapore almost always runs a budget surplus, and its constitution doesn't allow borrowing to pay for current spending.
Thanks for the clarification.
No prob!