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Tonight, I want to focus on this next stage of our economic
climb.
THE CURRENT DOWNTURN
But first, let me touch on the current economic downturn.
When I met the media earlier this week, they told me that
Singaporeans would expect me to speak in detail on the slowdown,
and offer solutions.
I explained why I did not intend to do so. We have already
discussed on many occasions our short-term problems. I want
to deal with the long-term challenges. Of greater concern
to me are the fundamental shifts in the global economic environment,
and the fact that many of the jobs which are lost during this
slowdown, might never return after recovery. We need a new
strategy to respond to these developments.
Moreover, during the 1997 Asian financial crisis, we had
put in place a major package of rebates and cost-cutting measures.
Parts of this are still in effect, including the CPF cut.
Then, in this year's budget, Richard Hu cut corporate and
personal taxes, and gave rebates on S&C charges, rentals
and utility bills. Recently, George Yeo announced another
package to deal with the current economic slowdown.
Let me assure you that if the slowdown drags on, we have
the means and ability to do more to help you. And we will
help you. My Ministers and I are watching the economy very
closely. We are working out possible additional measures,
just in case the economy continues to worsen and we need to
administer a second package.
Our current problem is the consequence of being a small,
open economy, highly dependent on external trade and foreign
investment. When the US and other major economies were growing,
we caught the strong winds and surged ahead. Now that the
winds have died, our growth has slowed to almost a standstill.
We do not have a large domestic market to go against changes
in the wind in the external environment. We just have to cope
with them. What the Government can do, however, is to make
sure that the economy stays competitive over the long term,
and soften the impact of downturns on businesses and workers
through cost-cutting measures and rebates.
We are doing the right things. In a recent survey of 12 Asian
countries by PERC, a Hong Kong-based risk-analysis consultancy,
Singapore ranked number one for quality of government policies.
PERC reported that:
"Singapore is a poster-boy of how to pursue economic
development. Now that the economy is slowing in response to
the downturn in electronic exports to the US, the (Singapore)
government is coming up with new measures to bolster growth.
Yet it is not panicking, nor is it radically changing other
policies that have been a source of stability and fortified
investor confidence. " (Asian Intelligence, July 25,
2001)
So do not lose confidence. Do not walk around with your head
hanging so low, as if we have been diagnosed with a grave
condition. We might be a little out of sorts, but it is not
life-threatening. When the global economy recovers, so will
we. We should therefore keep our spirits up, and fight off
any gloom. There is a bigger battle after this. We can succeed
only if our morale is high.
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