For the second year running, FinanceAsia has ranked the finance ministers of the Asia-Pacific region’s 12 largest economies.
FinanceAsia considers several factors when thinking about how to compare the performance of these men over the past 12 months. The role’s responsibilities and powers vary between countries but each minister contributes to fiscal policy and the budget, accesses capital markets, regulates financial institutions, and drives reform. Investor perceptions are one way to view how good a job they are doing, particularly when times are tough.
But the hardest criterion is independence. Most finance ministers serve at the pleasure of their prime ministers, presidents, or military dictators. Their ability to get things done requires political deftness, mastery of policy, sway over the bureaucracy, and the will to fight for the public interest.
Today's finance minister is taking over from a well-regarded veteran and may have his eyes on an even higher office - if he can tackle the serious economic challenges ahead.
Ranked No6: Heng Swee Keat, Singapore
After a decade at the helm of the city state’s finance ministry Tharman Shanmugaratnam ceded his position to Heng Swee Keat in November.
Heng ranks in the middle section of our field as he still has to prove himself in his new position, which may just mean maintaining the fiscal health that Shanmugaratnam stored up over the years.
Heng will deliver his first budget to parliament on March 24, a month later than usual for Singapore because he apparently needs more time to prepare, although, to be fair, Singapore does face some challenges in the coming year.
The increasing cost of living has introduced tensions within Singapore’s social contract. The 2016 budget also needs to buffer Singapore’s export-driven economy as economic growth slows in China.
The Inland Revenue Authority of Singapore collected a record S$43.4 billion ($30.3 billion) in tax revenue in fiscal year 2014/2015. Given pressure on Singapore’s economic growth, taxes are likely to be lower this fiscal year.
Political pundits are guessing that the government may seek to raise the goods and sales tax, which at 7% is one of the lowest in the world.
The budget in recent years has also shown a marked swing to the left, with assistance for the poor and higher taxes for the rich. Meanwhile, business is keen to see increasingly restrictive foreign worker policies reformed to help soften the impact of wage inflation.
Most importantly Heng must help to maintain Singapore’s stability as Prime Minister Lee Hsien Loong prepares to step aside for a new generation of leaders by 2020. Heng has been touted as a potential candidate to take over.
One to watch.
Tomorrow: a finance minister with the luxury of vast fiscal reserves