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SINGAPORE: Prime Minister Lee Hsien Loong said it is crucial to look beyond the financial storm as it will pass.
Speaking to members of Singapore's Foreign Correspondents Association in a wide-ranging discussion on Friday, he said the Depression of the 1930s is not on the cards and Asia is still dynamic.
He added that the priority of the Singapore government during a recession is to keep businesses afloat and to help people keep their jobs.
"I think that the recession – to the best of the experts' judgement – may last a year. Maybe if we are lucky, three quarters. But the recovery from the recession is likely to be weaker than from previous recessions and we must be prepared for several years of slow growth," the prime minister said.
Mr Lee was also asked about Labour chief Lim Swee Say's recent comments on foreign workers being the first to be retrenched among rank-and-file workers.
He responded by saying that while foreign workers help Singapore's economy, most of the jobs lost in the 2001 recession were held by foreign workers and this is likely to happen again.
"The practical economic reality, which we've got to get people to understand, is that if you send the foreign workers off, you make it harder for the firm. He may actually have to cut back instead of recruiting more and it may be worse for Singaporeans rather than better.
"Therefore, we have to be very careful, but I do acknowledge that the foreign workers are actually a buffer for us and one of the reasons why we allowed them in. But our responsibility as an elected government is to Singaporeans, and making sure our policies benefit them," said Mr Lee.
On the recent terrorist attacks in Mumbai, he noted that while Singapore's neighbourhood is unlike India's, the country needs to continue to be on the alert.
When asked by an Indian journalist about Singapore's bilateral relations with India following the Mumbai attacks, he said Singapore's engagement with India is driven by long-term considerations which are not changing.
As for Jemaah Islamiyah (JI) leader Mas Selamat Kastari who escaped from detention in February, Mr Lee said his whereabouts are still unknown.
"We made a mistake. He's a very determined man and he was more alert. He outwitted us and outsmarted us... But the game is not over, and one day we will catch him," he said.
Turning to ASEAN, Mr Lee said he hopes that the summit could be held next month in Indonesia under Thailand's chairmanship.
He added that there are important issues to settle, including sealing the ASEAN Charter, launching the Chiang Mai Initiative and meeting its dialogue partners.
Mr Lee said the Chiang Mai Initiative is a very valuable regional initiative to pool resources to tackle problems, particularly liquidity problems. But it is not the final solution for the member countries.
"For that, you have to work with the global institutions – the World Bank, the IMF – because not only have they got more resources, they also have more expertise and they have more credibility," he explained.
The prime minister also emphasised that ASEAN cooperation is vital and its member countries must press on and send a message to the world that ASEAN is still in business.
Borrowing a Chinese saying, Mr Lee said Singapore must cross the river by feeling the stones. Without imitating any model blindly, it will transform, grow and remake itself to rethink strategies in this new environment.
- CNA/so
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