The regional financial crisis arose out of financial excesses and a rapid erosion of investor confidence. Provided stability is maintained and effective reform measures are implemented, market confidence will be gradually restored in the regional economies and further fall-out will be minimised. But if reform measures are unsuccessful or stability is shaken, it could trigger off further uncertainty and economic difficulty.

The regional crisis will affect the Singapore economy significantly in 1998. We must all be prepared for the slower growth. However, Singapore is in a strong position to weather this regional storm. Provided businesses, workers and the Government rally together, we will successfully weather this difficult period and emerge more resilient.

Intense economic competition is already a reality. When the region recovers, the regional economies will be leaner, fitter and more competitive. Singapore must use this time to invest wisely, restructure, consolidate and build up our capabilities and productive capacities. Whether we can ride the next wave of growth when the region recovers depends on whether we continue to add value to the world.