We will only raise taxes after the next election: Lessons from a small nation

Tuesday August 7 2018

Mohamad Maliki bin Osman

Dr Mohamad Maliki bin Osman, Singaporean Senior Minister of State for Foreign Affairs and Defence. PHOTO | COURTESY 

By JACKSON MUTINDA
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The Singaporean Senior Minister of Foreign Affairs Mohamad Maliki bin Osman spoke to Jackson Mutinda about his nation’s desire for free trade and its interests in Africa.

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What is your foreign policy?

We seek open global markets. We are strong advocates of trade without barriers and protectionism.

We are a small country, with nothing much to export, except human resource so if we were to close our markets, what would we feed our population on?

Since most of our goods are imported, we would suffer by remaining closed in. We do not even have adequate land.

If our neighbours were to close their markets to us, what would we eat? There should be free trade on the globe without punitive tariffs.

What deals did you strike in Kenya and Rwanda during your June visit?

Singapore’s Deputy Prime Minister Tharman Shanmugaratnam and the Senior Minister of State for Trade and Industry and National Development Dr Koh Poh Koon visited Kenya and Rwanda in June.

In Kenya, we signed the Bilateral Investment Treaty and the Avoidance of Double Taxation Agreement while in Rwanda, we signed the Bilateral Investment Treaty and Bilateral Air Services Agreement. We also held bilateral discussions.

The signed agreements illustrates deepening bilateral relations and we hope that it would encourage greater trade and investments.

We want them to come to Singapore and see what we have to offer. We also want our businesses to venture out into East Africa and see the opportunities there.

Are you interested in the sectors in which other Asian players like China and Korea are involved?

No, we do not want to compete with China and Korea. We complement rather than compete with them. Those are big economies, compared with us.

In Africa, some of our companies have identified the agriculture sector as attractive and worth investing in.

These investments make an invaluable contribution to the United Nations Sustainable Development Goals and the African Union’s Agenda 2063.

Africa’s potential is huge, especially the demographic dividend. There is a big market and we tell our companies to go out there and invest. Some are there and doing well.

How do you market Singapore?

We export human resources. We are known for integrity, so we train our people to serve our government and also send them abroad to offer services.

We also sell Singapore as a transport hub in the region, with an airport and a seaport not only serving Asia and the ASEAN region but also the rest of the world.

Singapore is a free port where only four categories of items attract excise duty at the six-digit international level: Distilled spirits and wines, tobacco products, motor vehicles and petroleum products.

How do you administer your sovereign wealth fund and what lessons can African states pick up?

Our administration runs on an anti-corruption platform. Integrity is key.

We do not divert the money into uses it was not meant for, but we invest it well to earn some returns. The president has the powers to unlock the reserves to be used by government, through parliament.

How do you maintain integrity?

Through the education system. Singapore has one of the best education systems in the world. We teach our children to be good citizens, to earn the trust of the people and maintain it.

We are also honest and tell our people what we are doing.

For example, we have told our people that we will increase taxes on goods and services after the next election. That would seem suicidal for a political organisation, but we have to do it.

As a government, we have explained to the people that we had planned for this term and set aside enough money, but come the next election, there will not be much left for expenditure, so we have to increase taxes. That is integrity. If you are incorruptible and create good structures, you will earn the trust of the people.

As a multi-ethnic society, how do you maintain national cohesion?

It is something our founding leader Lee Kwan Yew invested in. We have structured our politics and communities in a way that the minority are always accorded the opportunity to participate.

Ethnic and religious minorities do not face discrimination, and we play fair. But to have a united people you must provide visionary leadership.

We also have peaceful transfer of power. Our democracy is unique to our history and society.

The Constitution was amended in 1990 to set up elected presidency. Just last year, we sworn in our first female President, Halimah Yacob.

Last year, we changed from an appointive presidency to an elective one. The president’s job is to check on the government of the day.

What are your government’s main challenges?

Terrorism. There are threats in the region as a result of the dwindling fortunes of the Islamic State in the Middle East.

However, the young people who had left to join the IS are returning. Recently, we deported an Islamic preacher to India, for propagating a divisive message. We also jailed a Christian couple for distributing anti-Islam leaflets.