| Singapore has to adapt to the challenges
of the new operating environment. Economic liberalization,
globalization and the rapid rate of technological advancement
have created a completely new competitive paradigm,
changing the way business is done and creating new products,
services and markets. We must now be even more fleet-footed
and move decisively to meet this change.
Fortunately, our fundamentals remain
solid. We have a robust fiscal position and a sound
economic framework. The Government has managed the economy
prudently and accumulated surpluses during the years
when the economy did well. It has invested heavily in
economic infrastructure, education and training to upgrade
the knowledge and skills of our workforce. We are an
efficient, well-organized society, operating by transparent
rules and rational principles. We uphold meritocracy
and keep out corruption.
These are valuable assets which we
should husband and maintain. However, for Singapore
to remain successful, it is not good enough to operate
the system according to existing rules, trying to do
what we have always done, only a little better. Although
it is necessary to constantly fine-tune our existing
policies, it is even more important to review the overall
framework of the policies from time to time, and decide
when fundamental changes have become necessary.
Major changes in policy directions
require a long lead-time to build up critical mass and
show results. All the more we must not be slow to shift,
when changes become necessary. Singapore's Asian Dollar
market would not exist today if, nearly 30 years ago,
Dr Winsemius had not proposed that we make ourselves
the regional financial hub, to take advantage of the
time zone differences between Asia and both Europe and
North America. Likewise, we would not have enough engineers
to support high-tech manufacturing today, if not for
a decision in the early 1980s, also strongly supported
by Dr Winsemius, to drastically expand engineering intakes
in our local universities.
Singapore has succeeded precisely because
we have looked beyond the obvious and immediate, and
been bold enough to take prompt corrective actions when
the problem was not yet obvious. It is crucial that
we continue to do so to ensure that we are competitive
amidst a whole new operating environment.
The Government has set up an Economic
Committee comprising representatives from the private
sector, academia and public sector to study this crucial
issue of Singapore's longer-term competitiveness. The
Committee will study trends in the global economy and
fundamentally question if our existing strategies and
policies that have worked for us in the past are optimal
or sufficient in the new operating environment. The
aim is not to seek palliatives for current problems,
but to identify longer-term solutions and strategies
to address the deeper, underlying changes and challenges
which Singapore has to overcome in order to maintain
our economic growth.
This is a crucial exercise. Our livelihoods
will always depend on external demand as the engine
that drives our economy. This remains a basic fact of
life, even though our economy is now bigger and more
diversified. We therefore have to focus on remaining
competitive and relevant to others. We also have to
monitor developments in the region and in the international
economy, and position ourselves against this broader
backdrop. These are the fundamental economic issues
which affect our future. If we get the fundamentals
wrong, day to day concerns such as the cost of living
or COE prices which consume so much attention and emotion
will become irrelevant. |
