Singaporeans who own condos ( only the richest 10% of the population while the poorer 90% are forced to lease their HDB flats from the Government for a maximum of 99 years) have long been able to profit from selling their property collectively to a developer for much more than they would receive if it was sold individually. This is a particularly attractive route for owners of older condos particularly as the hurdle for approval of an en-bloc sale comes down to 80% of the total area when the condo is over 10 years old.

Recently President Trump’s attempt to buy Greenland has been much in the news. Greenland, for those who might not be aware of the fact, is a self-governing territory of Denmark and the largest island in the world (and 13th largest country), though most of its 2.9 million square kilometres are covered in ice. The population is 88% Inuit and less than 60,000 according to Wikipedia. The main industry is fishing and the population is heavily dependent on subsidies from Denmark to maintain Scandinavian levels of healthcare and welfare provision.

The revelation provoked both incredulity and derision from Danes and Greenlanders, with comments from the latter as to why would they swap Scandinavian levels of welfare for the US’s decidedly less generous social provision. However what people are willing to say in public often diverges from how they will vote in a secret ballot as shown by the way most opinion polls prior to the US 2016 Presidential Election gave Trump only a 15% or so chance of victory. No price was mooted for the transfer of sovereignty from Denmark to the US though most of the estimates seemed to be around the US$1 trillion mark or slightly more. President Truman offered Denmark US$100 million for Greenland in 1946. In today’s money that would be about US$1.3 billion so if that deal had come off it would have been the bargain of the century. By way of comparison the Dow Jones Index has risen about 9 times over the same period.

If all of this money was paid over to Greenlanders (rather than part of it being used to reimburse Denmark for years of subsidies) it would amount to at least US$20 million per Greenland inhabitant. US$40 million would allow each household to buy a very big property somewhere warmer within the US, where they would be able to live and work as citizens) and have a lot left over to pay for healthcare and education to compensate them for giving up Scandinavian benefits. I believe most people would take the money if they were given a choice whatever socialist ideologues have to say.

You might be wondering why I am writing about Greenland which seems to have little relevance to Singapore. This is because I wanted to conduct a thought experiment as to what Singapore might be worth. It has long been a staple of PAP propaganda that Singapore was only a mangrove swamp and fishing village before the sublime genius and vision of LKY and his son transformed it into the richest country in the world, albeit one that would still claim “developing” country status at the WTO. I remember Gerard Ee’s words as Chairman of the Committee to Review Ministerial Salaries that the PM and his Ministers deserved outsize and obscene compensation because they had taken a barren rock and made it one of the most valuable pieces of real estate in the world. However the importance of its location controlling the world’s second most important waterway (after the English Channel) has been recognised since at least the 13th century and it was only the rise of Melaka in the 15th century that led to it being largely abandoned prior to the arrival of Raffles in 1819. Under British rule, Singapore was the jewel in the crown and far more important strategically and economically to Britain than Australia which was largely left to its own devices and became a democracy quite early on.

Taking Singapore’s area of about 276 square miles and assigning a price per square foot of $1,200 would give an approximate valuation of $10 trillion. However that is undoubtedly too low. While Greenland and Singapore might seem about as different as it is possible to be there are some similarities. Just like Singapore, most or all of the land in Greenland is state-owned though Greenlanders get much more in the way of benefits from their Government, courtesy of the Danes who subsidise them to the tune of US$600 million p.a., than Singaporeans get from theirs. Greenland’s attractions to the US are primarily its strategic location, both for defence against threats to the US (initially from Nazi Germany, then the Soviet Union and now Russia) and in terms of control of the Arctic seas and their resources. Global warming is raising the value as a year-round shipping route via the Arctic is becoming increasingly feasible. Singapore has always been more militarily significant given its role as a gateway between the Indian and Pacific Oceans.

Any bidder for Singapore would also get the mystery prize of acquiring both Singapore’s sovereign wealth funds, Changi Airport Group and MAS as well as all the other assets that the Government told President Ong it is too difficult to value (these should be much bigger now). I assume that the Government’s net financial assets are about $1 trillion +/- $500 billion though they should be considerably larger given the government surpluses stretching back forty or fifty years.

Including the reserves and assuming a purchase price of US$15 trillion (though it could go much higher if there were a bidding war between the US and China) this would work out to a windfall per citizen of over US$4 million. Not quite as good as the hypothetical Greenland payout but quite an attractive nest egg and distinctly better than the fake promises by LKY and his son that they were giving you an asset (HDB) that would never go down in value. A family could buy a very nice condo in Singapore or a McMansion in the US for that kind of money.

I am not seriously suggesting that Singapore should be put up for auction but wanted to draw attention to the fact that Singapore’s value is not due to the Lee family’s brilliant foresight or efficient management (which has always been about rewarding themselves rather than the people) but rather to our unique position astride one of the world’s most important seaways. We did not need to sacrifice our freedoms and hand them a blank cheque to thrive and would have done better if we had not.

I am not the first to speculate on what price Singapore might fetch if it was sold. A former ST journalist, Lee Chiu-san wrote a book in 2016 after Trump came to power entitled “Buy My Beloved Country” though I have not read his book so cannot comment on what price he thinks Singapore would fetch.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam