There is an aspect of him that is not much publicized. He had great financial wisdom. With him as the leader, the Singapore government kept on increasing its wealth. There is so much money, shares, bonds, buildings and land parcels owned by the Singapore government that it is doubtful anybody really knows the total wealth of the Singapore government.
The Singapore government has never put a number there. Speculations by non-government people have put the number at $500 billion to $1 trillion. (One Singapore dollar is about US$0.70). Compare this with the annual government expenditure of about $50 billion. There aren't many governments around the world that can run for 20 years without a single further tax dollar.
But the wealth of the Singapore government is really a lot more. Because the speculations have never included land value and the many buildings owned by the government. Do you know that it will take 56 man-years to come up with a number for the land value? (That means 56 man working together will take 1 year to produce the total worth, or 1 man working alone will take 56 years). Here is the official statement from the Ministry of Finance, Singapore: "The Accountant-General said that it would take 56 man-years to conduct a complete valuation of the physical assets, even though he had already produced the listing (without valuation figures)."
The above is just a glimpse of the wealth amassed by the Singapore government under the leadership of Mr Lee Kuan Yew.
What is his financial wisdom?
He put into law that every elected government cannot withdraw money from the Singapore reserve, except under very strict conditions. And he created an elected President to help enforce this. The elected President has to approve withdrawals from the Singapore reserve.
He put into law that any surplus money after each term of an elected government will mostly be put into the Singapore reserve.
He put into law that any sales of land must put the money into the Singapore reserve. Land is a very valuable resource in Singapore. Land sales recently have been about $10 to $25 billion a year. That is, land sales alone could be about half the size of the government budget. But it is squirreled away into the Singapore reserve.
This financial wisdom is implemented even at the lower level of Town Councils. Every term of an elected Town Council can use the town council reserve only for very specific items. Again, any surplus after one term will mostly go into the town council reserve.
Unlike some old folks who store their wealth under their pillows, he set up two sovereign wealth funds to actively manage the Singapore reserve and to grow through investment.
The Singapore government loves surpluses and reserves. Every government and semi-government organization has lots of reserve. As a side note, this love for huge reserves has permeated non-government organizations, including charity organizations.
In very simple terms, he believed that almost anything and everything that the government does must lead to a positive financial position. Even a non-financial policy to control the car population in Singapore scoops in billions of dollar every year.
The legacy of his financial wisdom is seen today not only in the gigantic Singapore reserve but, most importantly, in the many ways that the Singapore government makes huge money. Describing them all will need a long post. The important point to note is that the Singapore reserve is still growing very very fast.
(A future post: Comparing the financial wisdom of Mr Lee Kuan Yew and Mr Jay Hammond, who was an ex-Governor of Alaska)
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