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SANTIAGO, Chile: Singapore Prime Minister Lee Hsien Loong said on Friday that the current downturn Singapore is facing is nothing quite like what the country has experienced before.
Speaking to the Singapore media at the end of his visit to Latin America, Mr Lee said that while there is still bitter medicine to be taken, the Singapore government has put a bit more sugar coating on the pill.
Citing the 1985 financial crisis, Mr Lee recalled how the government had to roll out a host of measures to contain the economic downturn.
It was all about cost-cutting then, and there were no goodies announced. It included lowering the employer's CPF contribution rate, which is the country's national pension scheme.
Mr Lee said CPF cuts are not the government's first preference in the immediate term.
"I think we look at other measures first to reduce costs. We have quite a number of possibilities - focus on that first. We do not want to send too pessimistic a signal."
He said that the overriding priority is to secure jobs for Singaporeans, reduce business costs and ensure Singapore's competitiveness. These will be the focus for the upcoming budget.
Mr Lee noted that low and middle income Singaporeans have also not been left out, citing the Growth Dividends and income tax rebates that have been extended to these groups.
Still, he pointed out there is a need for Singaporeans to manage their expectations because the recovery this time round will not depend on the immediate measures Singapore takes.
Singapore is already in recession and Mr Lee said the country will experience many more years of slow growth.
That is because countries will need some time to collectively figure out how to deal with the financial crisis - never seen before since the Great Depression - and work out a new international financial regime.
But if there is a silver lining, it is in the resilience of Asian economies, which Mr Lee said are dynamic and still offers opportunities.
"We want people to know this is a serious situation which they have to prepare for, take seriously," he said. "But at the same time, we don't want people to panic, to think that this is the end of the world. It is not.
"During this downturn, we must do all that we can to prepare ourselves, which is why we are continuing to invest - whether in education, healthcare and infrastructure. You have to keep on doing these things for the long term."
Mr Lee heads back to Singapore on Friday.
- CNA/yb
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