1.7 The recent performance of the global economy and our economy reflects increased uncertainty and volatility. The business cycle has shortened and swings have become more extreme. For example, global chip sales enjoyed a boom year with 37% growth in 2000, but crashed in 2001, shrinking by 32%. Before 1997, Singapore enjoyed a decade-long boom with annual growth averaging 9.2%. Since then, our economic growth has averaged a very respectable 4.7%, but it has been a roller-coaster ride.¹

1.8 In the recession last year, all the external engines of our economy sputtered. The fall-off in global demand quickly filtered through to all sectors of our economy. The electronics industry was the worst hit. Export-oriented activities, such as the entrepôt trade and trade-related services were also badly affected. As a result, nearly 26,000 workers were laid off last year, and unemployment reached 4.4% by the end of 2001. 88,000 Singaporeans were out of work.

1.9 To help our businesses and workers through the downturn, the Government responded promptly with two off-budget packages last July and October, that together amounted to $13.5 billion. We brought forward infrastructure projects and reduced business costs. We distributed New Singapore Shares, focussing on helping lower-income citizens. We expanded programmes to retrain workers and get those who had lost their jobs back into the workforce. We drew on the savings we had built up in good years to tackle the crisis in a way that few other countries could.

¹Singapore's economic growth (1997-2001): 1997 (8.5%); 1998 (-0.1%); 1999 (6.9%); 2000 (10.3%); 2001 (-2.0%)