S'pore has no plan to further aid Jakarta

S'pore has no plan to further aid Jakarta

SINGAPORE (Dow Jones): Singapore Finance Minister Richard Hu said in Parliament on Friday that the country had no further plans to provide development assistance to Indonesia.

Hu said "there is no need to start yet another" plan, especially as the amount of humanitarian aid Singapore can provide is limited.

He added that humanitarian assistance is "already adequately covered by well-established mechanisms."

However, Singapore will focus on areas where help would be most effective and these would be "principally be in such areas as technical training and humanitarian assistance where the situation requires."

Singapore currently provides training and transfer of technical assistance to other countries through the Singapore Cooperation Program, administered by the Ministry of Foreign Affairs, Hu said.

This year alone, about S$16.25 million was allocated to the program, Hu said, adding that a considerable proportion has been channeled to Indonesia and Vietnam.

He said the program focuses on providing training and assistance in areas where Singapore has special competency such as maritime management, airport management, economic and trade development, and financial services.

At a scheduled sitting of Parliament, Hu also said that the Government of Singapore Investment Corp., the government's cash- rich investment vehicle, won't suffer losses as a result of controls on the ringgit recently imposed by Malaysia.

Addressing questions from members of Parliament, Hu said the government is expected to approve a law for companies to buy back their shares by November. Although the practice is very common in the U.S., Singapore companies are still forbidden from buying back their own shares.

Hu said the share buyback proposal is included in the Companies Bill 1998, which will be tabled later Friday.

The proposal, he said, was developed after extensive consultation with the Stock Exchange of Singapore, the Association of Banks of Singapore, the Singapore Merchant Bankers' Association, the Law Society and industry participants.

Once the bill is passed, companies need no longer apply to the court for approval to buy back their shares.

Currently, the only way companies can enhance shareholder value is through capital reduction exercises, which require the High Court's confirmation, Hu said.

In addition to being costly and time consuming, capital reduction exercises don't provide companies with the same flexibility as a buyback in terms of the amount of capital returned to shareholders, he added. He also said appropriate safeguards and disclosure requirements have been incorporated in the proposed amendments to ensure that companies don't abuse share buybacks.