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My fellow Singaporeans, good evening.
I am proud of us Singaporeans,
for our unity and our conduct in fighting SARS. SARS is a deadly
disease. But we fought it bravely and smartly. The threat was common
to all of us, and every Singaporean took up arms and closed ranks.
We stood shoulder to shoulder, regardless of colour or creed. We
lived up to our National Pledge.
Now, we need that same solidarity
and spirit to deal with another challenge - getting our economy
healthy and strong again.
We have suffered successive blows
in the last six years. First, the Asian financial crisis. Then,
the recession in 2001 and the Jemaah Islamiyah terror plot. And
this year, SARS.
SARS interrupted our recovery from
the recession. Overnight, the number of visitors to Singapore fell
by two-thirds. Our hotels, airlines and taxis emptied out. Restaurants
and shops were deserted.
As a result, the economy shrank
by 4.2 percent in the second quarter, the peak of the crisis. Unemployment
stayed up. I can understand why many of you are worried, especially
those who have been retrenched.
But take heart. We have faced many
storms before, and we have always pulled through. This time, our
recovery has taken longer than usual because of a series of unfortunate
events. But I am confident that we can overcome our problems, and
grow again.
Our economy, in fact, is beginning
to pick up.
Visitors are returning. Our hotels
are filling up. Businesses are reporting better results. Our exports,
which were growing even during the SARS outbreak, should improve
further. And despite the global slowdown and SARS, EDB expects to
get $7.5 billion worth of manufacturing investments this year, just
a little short of its target of $8 billion. Overall, our economy
should grow by 0 to 1 percent for the whole year*
Next year, we expect the external
conditions to improve some more, and Singapore should see much better
growth.
Our performance against SARS has
reinforced investors' confidence in us. They noted our swift and
total response, and the partnership between the Government and the
people. Companies and businessmen are impressed with our ability
to overcome shocks to our system. They have told us that they intend
to do more in Singapore.
But they have also cautioned us
to trim our costs.
The reason is simple: we are up
against strong competition from lower-cost countries. For the first
time in its history, PSA had to lay off staff to bring down costs
and prevent more shipping lines from crossing over to its rivals.
It had to cut wages too. We also face the same challenge as developed
economies like the US, which are seeing the migration of white-collar
jobs to India, the Philippines and Thailand.
In this more difficult environment,
what is Singapore's future?
My answer is: the future is bright,
provided we adapt to the changed competitive landscape, and do so
without delay.
We have many trump cards. Singapore
is secure, efficient and corruption-free. Singaporeans are well-educated,
hardworking, and willing to learn new skills. We are also resourceful
in overcoming problems.
Globally, we are enlarging our
economic space through many free trade agreements. These FTAs lower
tariffs and other barriers. They will widen the road and pave new
ones for Singapore goods and services to enter important markets.
Our most significant FTAs are those with the US and Japan. The China-ASEAN
and India-Singapore FTAs too, will give us better access to two
giant markets which are growing fast. Our FTAs with Australia, New
Zealand and the European Free Trade Association are also pluses
for Singapore.
Domestically, we are restructuring
our economy and bringing down business costs. We have lowered taxes
and fees, and will continue to do so to meet the competition. Our
land costs and rents have also come down. Now, we need to make our
wage structure more flexible and competitive, and retune the CPF
system.
If we make these adjustments, we
will have a clear start when business conditions pick up. We will
have jobs to go with growth, not jobless growth. We will not just
cope; we will soar again.
My fellow Singaporeans, our future
is in our hands.
This was not always so.
I was born a British subject during
the Second World War. A few months later, the Japanese army captured
Singapore, and I became a Japanese subject. When Japan surrendered
in 1945, I was a British subject again.
In September 1963, in my final
year in university, my nationality changed once more. This time,
I became a Malaysian. But relations between Singapore and Kuala
Lumpur were strained. Communal tensions ran high. A few weeks after
I started work in 1964, racial riots broke out in Singapore.
A year later, on 9 August 1965,
at the age of 24, I became a Singaporean. Finally!
Before that fateful day, it never
crossed our minds that Singapore would have to survive on its own
as a sovereign and independent state. But forced to leave Malaysia,
we struggled and sacrificed for many years to build up Singapore.
Today, Singapore is a vibrant economy,
and a safe and comfortable home for all seasons. The country has
thrived because we made difficult but right decisions, and implemented
them with resolve. Singapore may not be perfect, but it is our own
flesh and blood. This is our country. This is our home. Here, we
decide our own destiny. We must never give up on making Singapore
even better.
I wish all of you a very happy
National Day.
*Having contracted by 1.3 percent in
the first half, the economy is expected to grow by between 1.3 and
3.3 percent in the second half of this year.
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