The IMF Re-Re-Statement of Singaporean Public Finances

Balding's World

Earlier this summer, I wrote about the International Monetary Fund restating the historical Singaporean public surplus by an astounding $158 billion SGD.  The IMF increased the size of the Singaporean government surplus from $271 billion SGD to $429 billion SGD between 1990 and 2011.  Most interestingly, the increase in the surplus came not from an increase in revenue but rather a decrease in government expenditure.  I wrote about this and proceeded to research why there would be an expenditure would be reclassified as public savings.

However, when I subsequently revisited the IMF World Economic Outlook database to double check the numbers, the IMF had re-stated their restatement making it a re-re-statement.  The original surplus figures from September 2011, the April 2012 restatement, and the August 2012 re-restatement are below in Table 1.

What is interesting is that the IMF has re-restated the surplus back to near its original value.  The difference between the original value of $271 billion SGD and the re-restated value of $267 billion SGD is slightly more than $4 billion SGD.  In other words, the IMF magically made a $158 billion SGD restatement appear and then disappear.

Concerned by the discrepancy and having been questioning the IMF about the original $158 billion SGD restatement, I tried to contact the IMF with numerous questions about the re-restatement.

The IMF initially responded by saying the re-restatement in August of 2012 was to “address some technical issues” with the original restatement.  When I followed up about the nature of the “technical issues”, I was then informed that “backward extrapolation erroneously assumed” the first restatement which was published in error.  I was rather confused at this point as I had assumed that the IMF was working with actual data provided by Statistics Singapore or the Singaporean Ministry of Finance as noted in the data tables.  The IMF then responded that the 1990-2002 was mistakenly estimated on the year 2003 expenditure level, which remains unchanged, prompting a large shift in the total surplus from 1990-2010.  The IMF continued saying that it was only after a “subsequent statistical check”.

The IMF has refused to answer any questions about specific budgetary items that were reclassified or classified and then re-reclassified.  In short, the only thing that the IMF will confirm is that a re-restatement of the April 2012 data was made in August 2012 due to a mistaken estimation and faulty assumptions related to of Singaporean public finances after a “statistical check”.

This incident with the IMF raises numerous and disturbing issues.

  1. It is incredibly disturbing that the IMF is using assumptions and estimates to produce basic data.  This is not some technical result but one of the most basic questions of producing economic statistics: how much money did Singapore spend?
  2. It is incredibly disturbing that the IMF despite making multiple large statistical restatements cannot or will not provide any evidence supporting its actions.  The IMF increased the size of the historical Singaporean public surplus by approximately 50% of GDP, then restated the historical public surplus back to 1% of GDP, and provided no evidence to support its ongoing financial restatements.
  3. The IMF appears quite weak in the face of political pressure.  It was only 1 month after I initially published the post about the enormous discrepancy that the IMF re-restated their data.  Then despite regular emails and questions on public forums about this issue, they initially refused to even admit a change had been made.  Then they refuse to provide any data about the original restatement and the subsequent restatement to verify their statement that now the data is correct.  Given the size of the multiple restatements it would seem important to provide information about what items were reclassified both in the original restatement and the re-restatement.

Probably the most disturbing part of the IMF restatement was my research conducted believing the original restatement.  (In a following post I will detail the importance of the original restatement).  I was very easily able to uncover many large transactions that would fit the first re-classification description reducing expenditure but increasing the total surplus.  When I wrote the IMF that I easily found a large number of transactions that fit the first restatement asking them to explain the discrepancy, they responded that they “have answered all (my) questions regarding data revisions by the IMF.”  In other words, despite having data the fits the first restatement, the IMF is refusing to answer questions about why they restated the data back to near its original value or consider data that would negate their latest restatement.  This is extremely troubling.

I would like to make three final points.  First, the restatement or the re-restatement by the IMF do not in any way change the fundamental conclusion that there remain enormous discrepancies in Singaporean public finances.  I will provide much more detail about the discrepancy in a future post.  Second, I will provide much more detail in a future post about the original restatement, the serious questions it raises, and the evidence supporting the first restatement that the IMF refuses to discuss.

Third, though I had not planned to write on this topic so soon for various reasons I won’t discuss at the moment, I was forced to rush this forward due to the self serving actions of someone.  They had copied my research about the $158 billion SGD restatement and then refused to listen to me when I attempted to notify them that the IMF had restated the data.  Rather than consider the information that I had provided confidentially so as to help them avoid any legal issues, this person willfully and without regard for the sensitivity of the matter, published a public declaration of the IMF data restatement prior to being ready to discuss it more fully.  Given the sensitivity of the matter and ongoing work, this is incredibly unwise and rash decision making by someone who has selfishly copied my work and presented it as his own.

I continue to work on the matter to present a much fuller and detailed picture that will explain the enormous discrepancies in Singaporean public finances.  I will post as soon as is prudent and a more complete picture becomes available.