KUALA LUMPUR - Singapore’s Parliament on February 4 approved the contribution of SGD44.1 million (USD4.7 million) to two International Monetary Fund (IMF) grant schemes to help vulnerable countries manage economic shocks.

The contribution will be made through 25.48 million Special Drawing Rights (SDRs), an IMF reserve asset that can be exchanged into major currencies to support balance-of-payments needs.

Of the total, 21 million SDRs, worth about USD28.6 million, will go to the IMF’s Poverty Reduction and Growth Trust (PRG Trust).

Another 4.48 million SDRs, equivalent to about USD6.1 million, will be channelled to the PRG-HIPC Trust to support debt relief for Sudan.

Minister of State for Trade and Industry Alvin Tan said the Monetary Authority of Singapore had assessed the contribution as reasonable and in line with Singapore’s IMF quota share.

He said the funding would not draw on past reserves or affect government spending for Singaporeans.

“Every dollar we commit abroad must be weighed against our needs at home, for our seniors, for our healthcare and our social safety nets.

“Our contributions do not require Singapore to overextend ourselves, even as we do good,” he added.

Several MPs from both the PAP and Workers’ Party spoke during the debate, raising questions about the relevance of IMF contributions as global multilateralism faces challenges.

Some MPs also questioned whether institutions like the IMF can continue to function effectively in a more protectionist global environment.

Shawn Loh, a People’s Action Party (PAP) Member of Parliament for Jalan Besar GRC said he did not expect the government to produce a comprehensive solution at this stage, but wanted to leave the questions as food for thought. 

Citing an old adage, he warned that those without a seat at the table risk ending up on the menu.

Responding, Tan said IMF grant programmes continue to receive strong international backing, with more than 40 countries supporting the PRG Trust and over 120 backing the PRG-HIPC Trust.

“Singapore must and will continue to support key multilateral institutions such as the IMF.

“As a small city-state with an open economy and a global financial centre, Singapore has a strong interest in the continued stability of the international monetary system, which the IMF plays a principal role in safeguarding,’ he said.

Questions were also raised on why Sudan was selected as a beneficiary, with MPs noting governance and conflict concerns.

Tan said Sudan is the last remaining eligible country under the PRG-HIPC Trust and that IMF grants require countries to commit to key reforms.

MPs further questioned Singapore’s plan to lend 746 million SDRs to the IMF’s Resilience and Sustainability Trust, which supports long-term challenges such as climate change.

Tan also said the amount was small compared with Singapore’s total SDR allocation and stressed that IMF loans have always been repaid with interest.