'Once it's gone, it will never come back': PM Lee says he's 'anxious' about continuing to build up reserves

The reserves are a "great source of comfort and reassurance" should Singapore run into a tight spot, said Prime Minister Lee Hsien Loong.

But he is "anxious" about continuing to build them up in the face of the current economic climate.

The prime minister was speaking to CNA in an interview posted on YouTube today (Aug 16) on the country's reserves.

When asked if he is afraid that Singapore may lose its reserves, he replied: "I am proud that we have built it up and I'm anxious that we keep it like this for as long as we can.

"Because it's one of those things - once it's gone, it will never come back again. It is finished."

Singapore's fast economic growth in the 1970s and early 1980s, combined with surpluses and rising incomes, had the government then to "put aside some of this prosperity for a future rainy day".

The country is "not as poor as we were before" with higher incomes and living standards, but PM Lee said putting aside two to three per cent of its gross domestic product (GDP) today to build up a sovereign fund from scratch would be "very hard",

Likening Singapore as a "Garden of Eden state", he said: "You are here, it's marvellous. You may not always feel great, but please be aware this is the Garden of Eden.

"Because if you come out from it, you can't go back in again."

[embed]https://www.youtube.com/watch?v=BKGU8ekFmRQ[/embed]

In the interview, PM Lee was asked how much is in Singapore's reserves.

"I can't answer that question," he said. "It's enough for most circumstances. It's enough to give us substantial support in the Budget every year contributing to the government's revenues."

The Government does not disclose the full size of the reserves to protect national interests and prevent speculative attacks on the Singapore dollar.

Apart from himself, PM Lee said those who know the exact amount of reserves include the Minister of Finance, officials in the Finance Ministry who are involved in managing the reserves, the president and the Council of Presidential Advisers.

The government first drew on the country's reserves in 2009 when it took out S$4.9 billion to fund measures to boost the economy during the global financial crisis.

During the Covid-19 pandemic between 2020 and 2022, another $40 billion from the reserves were used on three separate occasions.

Describing the reserves as providing Singapore "with one extra card to play", PM Lee said the biggest misconception Singaporeans can have about the reserves is that "there is such a thing as enough".

He said: "How much is enough? If I have more than that, I can spend it. If I have less than that, well, maybe I hope we get there. I don't know how much is enough.

"Can I predict whether the stock market will go up or go down next year? Will there be a war next year? I do not know. I can make a guess. But bad things can happen. How much will I need? I also do not know."

PM Lee cautioned that Covid-19 is "far from the worst thing that can happen" to Singapore, adding that the "more productive way" to look at the reserves would be to think of it as "rainy day money".

"If it is not raining, I do not touch it. If it is a sunny day and I can afford to, I put a little bit more into it," he said. "However much there is, I keep on having this attitude that I would like to build it up a little bit more when I can, so that the next generation will be in a more secure position than I am today.

"And I think if we do this, our children and our grandchildren will benefit from that, and I hope they will be grateful to us for that."

ALSO READ: 'It gave me sleepless nights': President Halimah on unlocking reserves during Covid-19 crisis

chingshijie@asiaone.com