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High public debt of Singapore
25 Feb 2019 (79 views)

Dear Mr Tan,
I have notice that public debt of Singapore economy is at 114,6, it is higher than the US. ref: https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

There are only a few countries which are higher than us. Malaysia has only half of ours ref https://www.nationmaster.com/country-info/compare/Malaysia/Singapore/Economy
Most countries do not even come close to half of our level of public debt.

I wonder is it a good thing to have high public debt. why are there so few countries which out perform us in this aspect?

Fong

REPLY
You should look at both the debt and the assets
 
Although the SG government has public debts, it also have assets. For example, its assets include the loans taken by HDB owners to buy their HDB flats. It also has a lot of assets managed by GIC and Temasek.
 
Let me just pull out some figures from the air.

Suppose the govt (through HDB) build 1 million flats at an average cost of $200,000. They borrowed $200 billion to build the flats. But they sell the flats for $300 billion (say). So, the HDB owners owe $300 billion to the govt for the flats. Of the $200 billion that is borrowed to build the flats, maybe $100 billion is paid to the govt to buy the land. This money goes into the national reserves.

In this example, you see $200 billion reported as public debt of the SG government, but it ignores the fact that $100 billion goes into the reserves and the HDB owners owe $300 billion to the govt. 
 


High public debt of Singapore
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Dear Mr Tan,
I have notice that public debt of Singapore economy is at 114,6, it is higher than the US. ref: https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

There are only a few countries which are higher than us. Malaysia has only half of ours ref https://www.nationmaster.com/country-info/compare/Malaysia/Singapore/Economy
Most countries do not even come close to half of our level of public debt.

I wonder is it a good thing to have high public debt. why are there so few countries which out perform us in this aspect?

Fong

REPLY
You should look at both the debt and the assets
 
Although the SG government has public debts, it also have assets. For example, its assets include the loans taken by HDB owners to buy their HDB flats. It also has a lot of assets managed by GIC and Temasek.
 
Let me just pull out some figures from the air.

Suppose the govt (through HDB) build 1 million flats at an average cost of $200,000. They borrowed $200 billion to build the flats. But they sell the flats for $300 billion (say). So, the HDB owners owe $300 billion to the govt for the flats. Of the $200 billion that is borrowed to build the flats, maybe $100 billion is paid to the govt to buy the land. This money goes into the national reserves.

In this example, you see $200 billion reported as public debt of the SG government, but it ignores the fact that $100 billion goes into the reserves and the HDB owners owe $300 billion to the govt.