Second Reading Speech by Senior Minister of State for Finance, Mr Chee Hong Tat on the International Development Association (Amendment) Bill

1.   Mr Speaker, on behalf of the Deputy Prime Minister and the Minister for Finance, I beg to move, “That the Bill be now read a Second time.”

2.   The Bill seeks to amend section 4 of the International Development Association or IDA Act: 

a. IDA is part of the World Bank Group. It provides concessional loans to its least developed member countries. As a member of IDA, Singapore has contributed to IDA’s replenishments since 2002.

b. Currently, section 4 of the IDA Act allows the Government to pay for subscriptions to IDA, up to a cumulative “total subscription” cap of 1 million US dollars. It also allows the Government to seek Parliament’s approval to increase the cap, as the Government did in 2016 and 2019. The current cap is 1.3 million US dollars (equivalent to about 1.85 million Singapore dollars).

c. The amendments to section 4 will require the Government to seek Parliament’s approval for every additional subscription to IDA, instead of approving the cap for the cumulative amount of contributions. Parliament will therefore remain as the approving authority over any such expenditure.

3.   Mr Speaker, we are introducing these changes because IDA revised its voting rights framework in October 2021:

a. Under the previous voting rights framework, only a small part of the contributions made by a country would result in “subscription votes”.

b. However, under the new voting rights framework, all new contributions to IDA replenishments will equate to subscriptions.

c. For avoidance of doubt, it does not mean that our votes will go up sharply relative to other members. This change in method affects all IDA members.

4.   With this change by IDA, we can no longer meaningfully compare past and future votes, as the unit of measurement is no longer the same. We are proposing to amend the Act to reflect these changes.

5.   Singapore will continue to contribute our fair share to IDA as a responsible global stakeholder, while ensuring financial prudence and spending within our means.

6.   If Parliament approves this Bill, we plan to separately seek Parliament’s approval for our next subscription to IDA in 2023.

7.   Mr Speaker, Sir, I beg to move.