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SINGAPORE: Minister Mentor Lee Kuan Yew has said the current global recession is the most severe since the Great Depression of the 1930s. And he cautioned that it is just the beginning in Singapore.
But Mr Lee said: "Our reserves can see us through this crisis without going broke, although we have no natural resources, no oil, gas, palm oil whatever."
Mr Lee also gave the assurance that the government will ensure nobody falls below the poverty line. He was speaking after a tour of The Pinnacle@Duxton, one of Singapore's most expensive public housing projects.
It's perhaps an anomaly in the current times that public housing prices in Singapore have remained steady. But, Mr Lee said, unlike the housing crisis in the US, few citizens in Singapore have bought homes they cannot afford.
Singapore's property market is one example pointing to the country's strong economy. Other bright sparks - jobs available at the upcoming integrated resorts and continued investments by high-end manufacturing companies.
Mr Lee said the government will also prime the economy to prepare for tough times ahead.
But here's a reality check - it will be some time before Singaporeans will enjoy the same standard of living they experienced before the crisis.
Mr Lee said: "We cannot restore people (people's living standards) to what they were enjoying before the worldwide crash. But we will make sure nobody falls below the poverty line.
"After studying the situation carefully, ministers have to make a realistic estimate of how much we can afford in additional U-Save, Workfare and other alleviating measures.
"But again, it depends on our assessment of how long and how deep this recession will be."
Mr Lee said that no one knows how long the current downturn will last. His advice to Singaporeans is that they have to accept that sacrifices and cutbacks will have to be made.
The upcoming Budget, to be delivered in about four months, will be closely watched as the government announces help measures.
On the plight of investors who have lost money investing in Lehman-related mini-bonds, Mr Lee had this word of caution.
"Please remember, when you get higher returns than what is the average in the markets, that means you are incurring higher risk. So on that message I leave you to ponder about your next purchase," he said.
Mr Lee said many educated and young investors went in with their eyes open and banks will offer compensation according to what is fair.
- CNA/ir
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