ABSTRACT
Among the high income countries, Singapore, a city state with a population of 2.9 million, is alone in almost solely relying on the National Provident Fund (NPF) mechanism to finance social security for its rapidly ageing population. Singapore relies on the NPF mechanism, plus public assistance system based on the Poor Law tradition, to finance social security. The NPF system principles form the basis of Singapore’s Central Provident Fund system. Singapore’s high savings rate can be largely explained by public policies rather than by cultural and other factors. Foreign workers have become a vital component of Singapore’s economic strategy, and this is unlikely to change in the near future. If the funds raised through divestment are put in sectors with good growth potential, then privatisation in Singapore will have the effect of enhancing the already quite extensive role of the government in the economy.
