We should use this period as an opportunity to build on our considerable strengths, review our longer term strategies and position ourselves for future growth. Fortunately, our economy is now much stronger and resilient than it was in 1985. Our economic structure is more mature, our costs more aligned with productivity and economic growth, and our people better trained and skilled than a decade ago. Our current account surpluses and reserves are healthy, our export markets are well diversified, and our industrial and services base is broad. Overall, our fundamentals remain sound.

The Government is watching closely the impact of the regional crisis on our economy. The Committee On Singapore's Competitiveness has gathered private sector feedback and recommendations. We must make some adjustments to keep our business environment competitive, but drastic policy changes are not appropriate or necessary at this juncture.

In formulating our policies, the Government's key objective is to maintain the framework for economic activity. Market forces will compel industries to consolidate and restructure. Some industries will feel the fall in business demand more than others. Weak and over-extended companies may have to merge or fold. We must accept this. It is the normal process of adjustment to new economic conditions. The Government cannot prevent it from happening, or intervene to support companies which are in difficulty, without paying a high price in terms of misallocated resources and moral hazard. At the same time, we will push ahead with plans to restructure our economy towards higher value-added activities, and enhance our economic capabilities and competitiveness to support future growth.