46.

MAS has led the way in opening up the financial services sector. Financial markets are now more globalised due to lower transaction barriers across economies and world-wide deregulation. Rapid advancements in financial and informational technology are creating new and sophisticated financial products. The demarcations between financial products are blurring, and the Internet has opened up new service delivery possibilities. To retain our role as a key financial centre in Asia, Singapore needs to attract and develop new growth activities and players into the market. MAS has therefore embarked on regulatory reforms in banking, fund management, debt and equity markets so as to promote a more flexible and conducive environment for these financial activities to thrive.

47.

More recently, the IDA brought forward the introduction of full market competition in the telecommunications sector by 2 years, starting from 1 April 2000. Direct and indirect foreign equity limits for all public telecommunications services licences were also lifted. The decision to accelerate the liberalisation schedule was not an easy one, in view of our earlier commitments. But it was a necessary and right decision. With the rapid and dramatic changes in the telecommunications industry world-wide, the original liberalisation schedule would have stunted the growth of our telecommunications sector and severely undermined our competitiveness. It would have also set us back in our endeavour to develop a strong and vibrant info-communications industry, which depends on globally competitive telecommunication rates and services. By opening up the telecommunications sector sooner, we stand a better chance of attracting the major players and realising our aim to be an info-communications hub.

48.

Power is another critical sector where we need to be globally competitive. It is a key component of business costs. We started to deregulate the sector in 1995 when we corporatised the electricity and gas operations of the Public Utilities Board (PUB) to form Singapore Power Ltd. Since then, we have taken systematic steps to prepare for further deregulation. Within the next 2 years, we plan to open up the contestable parts of the electricity sector fully and also introduce competition in the natural gas industry.

49.

Through our deregulation efforts, we hope to ensure long-term efficiency in our power industry and achieve more competitive electricity tariffs for our businesses and households. Liberalisation also brings many other benefits for all consumers, including better service quality, greater product innovation and more choice of suppliers.

50.

If we can achieve a systematic deregulation process in our services sector, it can bring substantial spin-offs for the rest of the economy. It will further enhance the global competitiveness of our manufacturing sector. Harnessed properly, the forces of deregulation can strengthen Singapore's competitiveness in the new economy.