External debt figures on Singapore 'misleading'<\/p>\n
SINGAPORE (AFP): The Singapore government said Monday a report
\nby the World Bank, IMF and two international agencies that
\nSingapore's external debt had hit more than US$200 billion was
\nmisleading.<\/p>\n
Based on the International Working Group on External Debt,
\nSingapore's external debt dipped to $219.99 billion in June 1999
\nfrom $265.37 billion in December 1998.<\/p>\n
The figures meant Singapore's debt to gross national product
\nand debt to export ratios were at critical levels of 297 percent
\nand 415 percent respectively.<\/p>\n
\"This suggests that the size of our external debt is much
\nlarger than our economy,\" the Singapore department of statistics
\nsaid in a special report released to the media Monday.<\/p>\n
\"It may give the erroneous impression that we would have
\ndifficulties sustaining our external debt in a currency crisis.
\nThis is very misleading,\" it said.<\/p>\n
Apart from the World Bank and the International Monetary Fund,
\nthe International Working Group on External debt consists of the
\nSwitzerland-based Bank for International Settlements, which is
\nthe central bank of all central banks, and the Paris-based
\nOrganization for Economic Cooperation and Development, a club of
\nrich nations.<\/p>\n
The Singapore department of statistics said based on its own
\ncalculations, the island state's external debt was a modest
\n$14.73 billion as at end-1998, down 11 percent from a peak 16.5
\nbillion at end-1997.<\/p>\n
The department said its definition of external debt was
\nnarrower than the broad definition advocated by the international
\nagencies, which included inter-bank loans.<\/p>\n
Singapore defines its total external debt as all overseas
\nloans drawn by its corporate, government and household sectors
\nbut excludes overseas inter-bank loans of the island state's
\nbanks.<\/p>\n
It also does not include secondary forms of external debt,
\nlike debt securities.<\/p>\n
The department of statistics explained that Singapore, being a
\nkey financial center, was host to a large number of global funds
\nwhose branches here operated as intermediaries for their head
\noffices to channel loan funds to the region in the form of inter-
\nbank loans.<\/p>\n
\"The inclusion of inter-bank loans and non-residents' bank
\ndeposits will exaggerate the extent of Singapore's financial
\nliabilities to non-residents and distort the underlying economic
\nrealities,\" the department said.<\/p>\n
It would also \"exaggerate Singapore's vulnerability and
\nfinancial risks.\"<\/p>",
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