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Singapore's current property bubble is a short-term phenomenon that is not a cause for worry, said Singapore's Senior Minister Goh Chok Tong, neither is rising costs as it will mean a higher standard of living and more income in real terms.
The real longer-term worry is its talent pool and how Singapore will grow.
Making these points in an interview brodcast by CNBC as part of a special report on the anniversary of the Asian financial crisis, Mr Goh - who was Prime Minister of Singapore at the time - said he would not have done anything differently as Singapore did the right thing at that point of time.
Reflecting on the period, he said the main worry 10 years ago was whether the crisis would engulf Singapore or instil a sense of confidence in people.
Mr Goh said: "Once we have taken note of the whole situation, knowing that internally, our economy is strong, we were not too worried. We knew that we could survive.
"So, the most difficult thing was to give confidence to Singaporeans that we can survive the crisis. That’s where the cost-cutting measures amounting to some S$10 billion was a very important move on our part. It’s to restore confidence not just amongst investors, but amongst Singaporeans that we could withstand the crisis."
Mr Goh added that one of the big lessons was the need to have a strong financial sector.
He said: "We realized very much earlier that the financial industry is a global industry and therefore, you’ve got to be more aware of what’s happening in the world and in the region, in particular.
"So you’ve got to set up, not just internally but also externally, a system of regional surveillance of the financial performances of banks outside Singapore too. In other words, it requires cooperation from other countries as well."
He is also confident that an Asian financial crisis will not happen again since within Asia, banks have become much more transparent, with the regulatory authorities having become much more aware of the importance of transparency and good corporate governance.
There are also regular meetings, revealed Mr Goh, to ensure that if something does happen, others will be alerted and together action can be taken, such as the Chiangmai Initiative where countries met and agreed to have currency swaps between them, with a certain amount of their reserves set aside for this purpose.
Turning to domestic issues such as Singapore's rising costs, the Senior Minister said costs are always a factor and the government does worry about it.
"We do monitor inflation. Costs - we do worry. But that means you’ve got to move into higher value-added industries, like biomedical services and financial services, education, health and so on," said the Senior Minister.
"We cannot be doing things which we were doing before 1997, where China and India will become much more competitive. So, costs are always important, but we are not going to allow costs to prevent us from growing. Just move into the right sector," he added.
Mr Goh said that his concerns for Singapore now are on the next lap for the country and not centered on the active property market.
He said: "The prices are at the higher end. We watch very closely. Prices for the middle-income and for the HDB heart-landers - prices there are still quite affordable for Singaporeans in general.
"So, my worry will be where do we go from here? It’s a longer-term worry. It’s not a short-term worry. It comes back to my point about talent. For Singapore to grow, you need talent, talent from Singaporeans or within Singapore and talent from outside."
The Senior Minister went on to say that though Singapore is a small country and there are always other economic competitors globally, time will hopefully develop in Singapore a confidence that it can survive, whatever the problems that may come.
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