Dealing with the global crisis

I expect the global economies to go through a difficult time over the next two years. Many analysts and economists are worried about the debt crisis in USA and Europe and the slowdown of the economies in the advanced countries.

We should be prepared for a difficult time for the Singapore economy. We can expect more people to become unemployed.

If I were the Finance Minister, I would implement the following measures:

• Allow unemployed people to make monthly withdrawals from the CPF account. The amount should be sufficient to meet their monthly expenses. This can be for a period of 12 months and may be extended.
• If there is insufficient balance in the CPF ordinary account, allow negative balance to be accumulated (with interest at 2.5% per annum). The negative balance will be recouped from future contributions, when they find a job. If it remains negative at the time of retirement, it can be a charge on the property that has been purchased with CPF funds
• The monthly repayment of the mortgage loan can be deferred during the period of unemployment.

If the unemployed people are not required to sell their property during this distressed time, the property market need not collapse - which was what has led to the problem in the USA and Europe. 

Tan Kin Lian