May 30, 2013

Singapore's wealth comes from its people

"Singapore is a different case entirely. [Different from Norway's SWF] The assets of our SWFs represent forgone consumption by present and past generations of Singaporeans. There were no resources that were used up to earn those assets only sacrifice and austerity by Singaporeans past and present. In other words, the sweat of your grandfather’s brow, people being denied medical treatment that is freely available in most other advanced countries and our old people, the disabled and those in single parent households having to live in hardship. I could go on but I have made the point repeatedly that our people live in wholly unnecessary austerity to accumulate surpluses that will never be spent even if they are not frittered away through poor investments.
There is no obligation to pass on these assets to future generations and it should be up to individuals to make their own decisions as to how much they want to leave (in economics we call this their intergenerational time preference function)."

This is a very interesting comment on how Singapore's sovereign wealth fund is accumulated. While the funds of Alaska and Norway come mainly from oil revenues, the Singapore wealth fund comes mainly from its people.

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