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SINGAPORE : Singapore's Minister Mentor Lee Kuan Yew has said the country has over S$100 billion in reserves today, unlike the 1960s when the country first gained independence.
But the Republic has not relied on borrowing to fund its investments.
Mr Lee said: "Within three to four years, the economy must recover."
The minister mentor gave his forecast on the economy to 1,500 of his Tanjong Pagar constituents at a Lunar New Year dinner on Friday.
He said that the Singapore government turned many of its stocks and shares into cash early last year before prices went down. That was why the country was able to invest in the American banks.
Mr Lee explained: "When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up."
But he said that Singapore is not a master of its own economy.
He said: "Of all the economies in the world, we have the highest percentage of external trade - three and a quarter times our GDP. No other country has got that size of external trade. So when the external trade shrinks, remember it is going to hurt us."
Still, Mr Lee is confident Singapore will recover from the current downturn, due to various reasons like good labour relations and pro-investment climate in the country. But he said that giving handouts will not help boost spending and the economy.
"So those MPs who say, 'Give S$300 to every citizen and we will boost the retailers', they just do not understand the bigger picture. You give S$300 like that and it is gone in a shot, and all the things that they will buy, three-quarters of it are imported," he said.
Mr Lee added that, with luck, America's economy may recover by the end of this year or early 2010. He said the outcome of President Barack Obama's economic plans is expected in nine months. And by then, the Singapore government may have to update its record S$20.6 billion national budget. - CNA/ms
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