Singapore to give shares to citizens

Economic pressure means more, if limited, liberalisation

Singapore's government is planning to give all its citizens "shares" in the country, as a means of distributing part of any budget surplus back to the population.

In his National Day speech celebrating 36 years of independence - and 11 years in power himself - Prime Minister Goh Chok Tong said the share scheme would target poorer Singaporeans in particular as part of a "new social compact".

Under the tag "New Singapore Shares", the scheme will pay a dividend each year for a fixed term, Mr Goh said, with an additional bonus payment when the economy is doing well.

The details of exactly who would get what have yet to be finalised and will depend in part on the state of the economy - judged by the upcoming third quarter economic figures.

"How much to whom, and when, will depend on the state of the economy this year," Mr Goh said.

Surplus budgets

The plan is for the shares to be redeemable in small lots for cash, although cashing in an entire allotment at once will be illegal.

Goh: plans for Singapore shares

The scheme relies on the continuation of Singapore's budget surplus, a regular occurrence in the city state given the government's long-term suspicion of deficit financing.

Deep reserves have also contributed to the healthy state of the budget, with interest on the reserves further feeding the surplus.

This year has been difficult for Singapore's economy, in line with the problems experienced around the globe.

The second quarter saw a year-on-year contraction of 0.9% in the economy, leaving growth at 1.8% for the first six months of the year.

And non-oil exports slid 24% in July, the fourth straight month of decline.

The state of the global economy was a key feature of Mr Goh's speech.

I know some people want even greater freedom. But where politics is concerned, I prefer to ease up slowly rather than open up with a big bang

Goh Chok Tong, Singapore's prime minister

The country needs to reach out to other states within seven hours' flying time, he said, a distance which covers China and Japan as well as South Asia.

China's impending entry to the World Trade Organisation could pull investment away from Singapore, putting its status as an electronics export centre at risk, he said.

Lightening up

Mr Goh said the situation demanded more innovation - and some loosening of Singapore's traditionally strong constraints on social activity and free speech.

Arts and culture were thriving, he said, and the "Speaker's Corner" - an outdoor forum for debate in a public park - was proof that restraints were being eased.

But he said the process had to be steady, warning that if the government thought public comments would interfere with law and order, national security and national interests, "it has to rebut them: if necessary, forcefully".

Mr Goh also pointed to glasnost in the Soviet Union as an example of the social and economic implosion that could be triggered by moving too fast.

"I know some people want even greater freedom," he said. "But where politics is concerned, I prefer to ease up slowly rather than open up with a big bang.

"We should, therefore, pump the air into the political balloon slowly."