1918 - 2010 Goh Keng Swee - People's Action Party - PAP

Building an army in two years was akin to a miracle, said Goh.
Currency issue
It was Goh who insisted that the
Currency Board – a colonial legacy –
issue Singapore dollars, rather than
MAS when it was set up. Again, Singapore
stood out as an exception among
newly independent states.
Acknowledging that it was “a
strange anachronism in this age of
electronic finance”, he argued that governments
cannot “spend their way to
prosperity” and that every single Singapore
dollar has to be fully backed by
reserves. This prevents over­issuing of
new money that can lead to inflation,
and ensures the country’s currency remains
stable.
However, MAS has since taken
over the board’s functions.
Wealth fund
Having dragged Singapore out of its
financial pit, Goh was faced with growing
state coffers in the 1970s. Asked to
find ways to obtain better returns from
the surpluses, he came up with an independent,
professionally­managed
– the Government of Singapore Investment
Corporation.
Its task was to find long­term investments
for the spare cash. This allowed
MAS to focus on regulating banks and
managing the country’s currency.
This pioneer in sovereign wealth
funds is now possibly the fourth largest
in the world.
Development bank
Singapore’s largest local bank, DBS
Bank, started off as the finance arm
of the EDB. Its main aim was to help
finance new, relatively risky projects
that others avoided, such as infrastructure
building and electronics manufacturing.
Goh pushed for it to list publicly
and, later, become a full­fledged commercial
bank.
Savings culture
Ninety years after the British set
it up, the Post Office Savings Bank
(POSB) was in decline. However, Goh
saw its potential to start a savings culture
here. On top of that, the money
could be used for development projects.
To encourage the lower­income to
stash their cash, he waived the need
for a minimum sum required to set up
an account and the tax on interest paid
on the savings. As people’s incomes
grew, savings too would grow, he reckoned.
Singapore now has one of the highest
national savings rates in the world
– 55 per cent.
DEFENCE
Army days
When Singapore became independent,
it had only 1,000 soldiers, 75 per
cent of whom were Malaysians and
British, who owed no loyalty to the
new country. As the first Defence Minister,
Goh Keng Swee had the major
headache of building a defence force
from scratch.
He started by calling for volunteers,
dragging in MPs to his People’s
Defence Force.
His initial idea was to have 12 battalions
of regulars, but was asked to
come up with a scheme where civilians
would also be trained and could
be called on if needed, “because the
security of every society must always
depend, more or less, upon the martial
PETIR MAY / JUNE 10
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