Mr Speaker, Sir

1.1 I beg to move that Parliament approves the financial policy of the Government for the financial year 1st April, 2002, to 31st March, 2003.

1.2 The sweeping changes of the last five years have fundamentally re-shaped the world. In 1997, the Asian Financial Crisis overwhelmed our region, abruptly ending three decades of peace, stability and economic development in Southeast Asia. The economic, political and security consequences of the crisis have yet to work themselves out. In 2001, economic conditions world-wide grew even more difficult as the world's three largest economies - the United States (US), Japan and Germany - experienced sharp, synchronised downturns. Singapore was directly exposed to these external shocks.

1.3 Then came the September 11 terrorist attacks on the US. Fortunately, the initial fears of major economic dislocation and loss of confidence have not materialised. However, we in Singapore have learnt how real and close to home the terrorist danger is, rooted in the region and threatening our security.

1.4 Last year, our GDP shrank by 2%, the worst decline since independence. Many Singaporeans lost their jobs. Fortunately, our strong social cohesion helped us to weather the storm.

1.5 We are entering a very different world. Conditions are uncertain and volatile, competition is intense, change is faster than ever. Our ability to adapt nimbly and quickly will give us a valuable edge. In our personal lives too, we must expect change and disruption. Lifetime learning and training will be the norm, while a life-long career in one job will become less and less common.

1.6 We cannot prevent the changes from happening. Instead, we must act decisively to restructure our economy, and prepare for the challenges ahead. We have the resources to do this, but we must start early. This is our best hope of staying ahead in the race, and creating jobs for our people. This Budget is constructed with these objectives in mind.