Simply put, it is irresponsible for Jamus to say that crisis speculation is good.
What is so “novel” about A/P Jamus Lim’s fiscal policy recommendation in parliament? A/P Jamus proposed for transparency of our reserves and claimed that it could encourage a “stabilising effect” through currency speculation. Having seen the 1997 Asian Financial Crisis, I found Jamus’s proposal incredulous and irresponsible.
If any lessons are to be learned from the Asian Financial Crisis, it is how unchecked currency speculations can lead to devastating impact on people’s lives and livelihoods. This brings us back to July 2, 1997 when the Thai baht, Filipino peso, and Indonesian rupiah came under massive attacks. Speculators made billions of dollars in profit, while ordinary citizens in those countries lost their jobs and saw prices of daily essential items soar beyond their affordability as the value of their currency plummeted.
Beyond economic ramifications, the Asian Financial Crisis destabilised societies. For example, in Indonesia, the depreciation of the rupiah led to a loss of political confidence and a collapse of the country. Indonesians are still suffering ramifications of this deep scarring.
Our national reserve is a strategic asset to defend the Singapore Dollar and our economy from speculative attacks. Like how we don’t publish information on our national defence capabilities, we shouldn’t also foolishly publish how much reserves we have to currency speculators.
Our approach is not unique. Even the famed global investment fund, Berkshire Hathaway founded by Warren Buffet doesn’t disclose its full stock portfolio to prevent speculations.
I expect better of A/P Jamus Lim. Please have a care for the lives and livelihoods of ordinary Singaporeans when making proposals in Parliament. This is not an academic theoretical exercise or a political populist game.
At the recent debate in Parliament, WP Jamus Lim said that currency speculation can be stabilising for the economy. This drew a response from PAP Saktiandi who is also Head of FX Research team in Global Markets at Maybank. Mr Saktiandi told him that the impact of currency attacks can never be stabilising. It has ramifications on the economy. It has ramifications on jobs.