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SINGAPORE: Singapore's economy grew 1.5 per cent this year, according to Prime Minister Lee Hsien Loong.
In his traditional New Year Message to Singaporeans, Prime Minister Lee also warned of job losses in the year ahead, even as he expressed confidence that the country would recover from the economic downturn.
The world is entering the most serious economic crisis in 60 years, said Mr Lee. "As a small, open economy, Singapore cannot avoid being hit," he added.
Mr Lee said that quite likely the global recession will be followed not by a quick rebound, but by several more years of slow growth.
Singapore's economy, which is already in recession, will probably contract further next year, said the prime minister. A difficult first half is expected and with more companies forced to downsize, Mr Lee warned of more retrenchments ahead.
He said that the Singapore government has responded promptly to this economic storm with the key focus on jobs. The next major move will be the 2009 Budget in January and the emphasis is still to protect jobs.
Mr Lee added that the government would do more to help viable companies to stay afloat and continue to employ their workers. It would also introduce measures to help them with their business costs, including rental and wage bills. The government is also studying further financing support for companies.
The prime minister emphasised that in the midst of the storm, Singapore must keep pursuing new growth chances and look beyond the immediate problems to ensure that the country emerges stronger after the downturn.
Hence, the 2009 Budget will also contain measures to develop competitiveness and build up new and long-term capabilities.
For 2009, the Economic Development Board forecasts investment commitments will be lower but could still exceed S$10 billion.
Mr Lee cautioned that the Budget package will not restore the economy to high growth overnight. But Singapore's measures will moderate the impact on the people and the economy.
Government ministers, in their visits to heartlands, have said that the government would do its best to help Singaporeans tackle this difficult period.
The reassurance was repeated in Prime Minister Lee's New Year message. But government help alone will not solve the problem. He said that companies, unions and workers have to play their part.
Mr Lee said: "Every one of us has a part to play. Companies should work with the unions to find ways to cut costs, and consider downsizing only as a last resort.
"During a downturn, businesses should try hard to keep their core team together, to hold on to their critical knowledge and skills. They should also take advantage of this slack period and the available schemes to build new and better capabilities. Such a far-sighted approach will pay off when the upturn comes."
Besides the economic downturn, the recent attacks in Mumbai were a vivid reminder of the political instability and security threats in the region.
While Singapore authorities are doing their utmost to prevent a similar incident here, Mr Lee said that there is no 100 per cent guarantee that the Republic will never be hit.
Hence, Singapore must strengthen its psychological resilience and social cohesion so that should an attack ever occur despite all efforts, Singaporeans can absorb the shock, pull together and recover from the blow.
Meanwhile, shoppers thronged post-Christmas sales, showing signs that they have good reasons to be quietly confident in a country that Mr Lee said started with precious little but built a prosperous and cohesive multi-racial nation through ingenuity and effort.
Mr Lee said: "Singapore's key strengths are our honest and capable leadership, sound policies which look beyond the short term, social cohesion and talented and hardworking people. These strengths have brought us peace, prosperity and progress for decades, and they will see us through these difficult times.
"When the environment was favourable, we upgraded and grew our economy, lived within our means and patiently built up sizeable reserves. So when this sudden, severe storm struck, we were ready."
That is why Singaporeans will overcome this downturn and meet the future with confidence.
- CNA/ir
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