Endnotes

¹Unless otherwise specified all Dollars refer to Singapore Dollars (SGD). Exchange Rate as of Aug 13 2008: 1 USD = 1.40 SGD.

²Between 1900 and 2000, there was a near quadrupling of the world’s population.

³TFR is defined as the average number of children that would be born to a woman over her lifetime, under certain specific assumptions. The officially reported TFR for Singapore at 1.29 in 2007 is however much higher. The TFR of 1.3 has a special mathematical significance for demographers. At that rate, a country’s population is reduced by 50% in 45 years.

⁴Data for other countries were obtained online from ILO LABORSTA database, http://laborsta.ilo.org/, accessed on 12 June 2008.

⁵As at 31 March 2000, the total assets of the Singapore government were US$319 billion (Asher 2003). Estimates of such assets are not available for recent years.

⁶The state currently holds more than 85% of land, which it leases to users. At the time of Singapore’s Independence in 1965, the government owned only 40% of the land. There is neither a constitutional nor a common law right to own land.

⁷Singapore’s two Sovereign Wealth Funds (SWFs), Government Investment Corporation (GIC) and Temasek Holdings, as a result of specific statutes, are not required to provide any information on their investment policies and performance. Recently, there has been a provision that 50% of net investment income (whose definition is not provided by the authorities) will be included in the budget. So, the figures cited in the text on the contribution of investment income to fiscal revenues significantly understate their contribution. Truman 2007) estimates Singapore’s foreign exchange reserves at US$152 billion (as of September 2007) and its SWF assets at US$323 billion.

⁸For a more detailed analysis of the composition of saving in Singapore, see Peebles and Wilson (2002).

⁹The Baby Bonus Scheme was introduced in 2001. It provides children of citizens (first to fourth child) a cash gift of S$6000 and co-savings (i.e. a dollar for dollar matching) of up to S$12,000 per child by the government. The scheme applies until the child is six years old (http://www.babybonus.gov.sg/bbss/html.index.html). These appear to be a relatively small proportion of the total cost of bringing up a middle-class child.

¹⁰Personal communication with Dr. G. Shantakumar.

¹¹Foreign workers who are not citizens or Permanent Residents (PRs) are not permitted to be a part of the CPF system. They also do not receive public assistance or other benefits.

¹²The total CPF contribution rate was 36% in 2001, with a wage ceiling of $6000, with the employer and employee contributions at 16 and 20% respectively. The employer contribution was reduced to 13%, for a total of 33% in 2003. The rate and wage ceiling changes have been undertaken in response to macroeconomic conditions and the perceived need to sustain Singapore’s business competitiveness. However, these changes are potentially reducing resources from the CPF for retirement at a time when the need for more resources is urgent due to demographic trends.

¹³The minimum sum is the amount people must keep in their retirement accounts after withdrawing their CPF at age 55. Currently, a member may withdraw the minimum sum (as of 1 July 2007 this was $99,600) at age 62 in monthly installments over roughly a 20 year period. According to official figures, of the 22,600 CPF members who turned 62 years in 2006, only 34% were able to meet the minimum sum requirements. The median shortfall for the remaining members was $49,300, nearly 50% of the minimum sum.

¹⁴Chua (2007) has argued that the inflation rate in Singapore, as measured by the Consumer Price Index (CPI) is significantly understated, primarily because of the way the housing component is incorporated. This could result in even lower real rates of return.

¹⁵On balances in SA and MA of the CPF funds, the administered interest is 1.5% higher than the declared rate.

¹⁶As at March 2004, total accumulated budget surpluses were $399.1 billion or 228% of GDP (IMF 2006: 16). The IMF (2006) study reports that “there is…no comprehensive information on the market value of the government’s assets, including those of the Government of Singapore Investment Corporation (GIC)” (p. 16).

¹⁷In August 2007, the government announced that the members will have to compulsorily purchase an annuity from their own balances at age 55, while the benefits will be paid after a member reaches 85 years. The government has ruled out any budgetary support for the system. But the other details have still not been announced. The compulsory annuity will reduce already low CPF balances, thus adversely affecting the adequacy. If the generally observed correlation between income and life expectancy holds for Singapore, then the compulsory annuity will be inequitable as poorer groups will receive proportionately less benefits. There are no plans for inflation indexation of the annuity.

¹⁸The Singapore government has adopted an opt-out method for enrolling newborn babies into the Medishield System. Such a method is to be extended to school-age children as well.

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