Managing crises and public financial management in Singapore

Crises necessitate the mobilization of additional resources outside of the regular budgeting cycle, often, with a corresponding increase in fiscal deficits and public debt. Singapore is an outlier in this respect. This chapter discusses Singapore’s public financial management practices and how several features serve to enable Singapore to mobilize fiscal resources in response to crises without incurring substantial long-term fiscal deficits and/or government debt. Two stand out in particular: (i) fiscal rules that give medium-term flexibility in budgetary management and utilization but prohibit discretionary use of past accumulated fiscal surpluses or borrowing for current expenditures; and (ii) discerning identification and use of broad-based taxes and nonconventional sources of revenue that exhibit less volatility. These are complemented by an efficient tax administration and a political economy environment with minimal inter- and intra-agency competition for fiscal resources. Singapore’s budgetary responses to the COVID-19 pandemic provide an illustration of these features.