Goh Chok Tong: Developments in Singapore within the last 10 years
Speech by Mr Goh Chok Tong, Senior Minister of the Republic of Singapore and Chairman of the
Monetary Authority of Singapore, at the Singapore International Chamber of Commerce's (SICC)
170th Anniversary Dinner, Singapore, 25 May 2007.
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Distinguished guests
Friends and Fellow Singaporeans
I congratulate the SICC (Singapore International Chamber of Commerce) on your 170th Anniversary.
You are one of Asia's oldest chambers of commerce, and have contributed much to Singapore's
development.
Ten years ago, in May 1997, I spoke at your 160th Anniversary Dinner. Little did I know then that
within months, the Asian Financial Crisis would erupt and devastate many countries in Asia, plus a few
outside. Singapore suffered collateral damage but our economy was relatively unscathed. What was
the big lesson learnt? It was not just about having a flexible exchange rate or better supervision of the
financial industry. It was: get your fundamentals right, build a strong economy with good governance.
Then, you will better survive any unexpected financial or economic earthquakes.
Following the Asian Financial Crisis, the world was hit by the dot.com bust and the September 11
attacks in 2001. The global economy slowed down and ours went into recession. Within one year,
23,000 jobs were lost. Just as we were recovering, we were hit by SARS (Severe Acute Respiratory
Syndrome).
But in typical Singapore fashion, we kept our cool to battle the crises and, at the same time, strategise
to meet the larger challenges posed by globalisation. We formed the Economic Review Committee
(ERC). The ERC came up with a comprehensive strategy to restructure, upgrade and transform our
economy. The government accepted most of the ERC's recommendations. We have since cut
corporate and personal income taxes, reduced business costs, made wages more flexible,
restructured the manufacturing sector, invested more in R & D (Research and Development) and
revamped our education system.
Our economy is now stronger and more broad-based than ever before. In 2006, our GDP was S$210
billion, 55% bigger than in 1998. Annual growth rate over the past 3 years averaged 8%, double the
figure for the period between 1997 and 2002. This year, jobs are chasing after people.
Two weeks ago, I attended the Gala Dinner for Merrill Lynch's inaugural "Pan Asia Rising Stars
Conference". Several foreign bankers and business executives I met - some had not visited
Singapore for many years and a few were here for the first time - told me that they were surprised and
excited by the "buzz" in Singapore. It is not just the business buzz of the financial industry, the
Integrated Resorts, the sizzling property market, and so on. It is also the glitz of our nightlife and our
arts, culture and restaurant scene.
How have we managed this quick and dramatic rebound?
First, we have a government which has the capacity to think long term and implement tough policies to
resolve problems and transform the economy. The government is not bogged down by disruptive and
unproductive domestic political pit fights. Our basic economic strategy is right; our implementation
good. We are moving up the value chain to more technology- and knowledge-intensive manufacturing.
We are growing our services sector in areas like tourism, healthcare, education, banking and
insurance. We are pumping money and talent into R & D. We have enlarged our economic space
through FTAs (Free Trade Agreements) and moved into new areas like the Middle East. Foreign
Minister George Yeo has just visited Libya and Yemen, the first Singapore Minister to do so. At the
right time, I will go there too to strengthen our relations. Minister Mentor is himself engaging Russia
and Kazakhstan to open up business opportunities. And if there are opportunities in North Korea, we
will go there too. I dare say that our Ministers are not just good at forging relations but also
enterprising like businessmen.
Second, we have intelligent, hard-working and adaptable people. They know the world has changed
and is constantly changing. They know they must run ahead of the pack in order not to be eaten by
the proverbial lion. Some Singaporeans grumble and complain about the government and its tough
policies but basically, they are nagging the government to listen to them more. Singaporeans are
pragmatic and disciplined. They are prepared to take bitter medicine prescribed by the government. If
our people resist change like they do in France and Germany, our economy would be sluggish and
unemployment high.
Investors and international analysts have noted the way Singapore has reinvented itself. Many foreign
leaders have also studied Singapore to discover the secret of our success. The Foreign Editor of a
German newspaper I met earlier this week said that he was struck by Singapore's development. So he
could not understand why many Singaporeans he had interacted with talked about Singapore's
survival in the same breath. This was his first visit to Singapore. He was not fully familiar with our
history, geography and geopolitics. I confirmed that indeed we worried constantly about our future. I
explained that as a small country with only a short history, we have an acute sense of vulnerability. I
likened Singapore to a small boat crossing the vast ocean, fully exposed to the elements. So we have
to be alert to changes in the wind and current directions, and any signs of danger.
No matter how well we have done up to now, being vigilant and prepared will continue to be our
approach to life in a changing environment.
Ten years ago, before the Asian Financial Crisis, ASEAN was a preferred investment destination for
global investors. Today, it is not the only choice. Moreover, competition for high-value investments will
grow keener. China will move from low-cost manufacturing into higher-value industries. Shanghai will
become a big financial centre, first serving the Chinese market, and later, an international financial
centre. Mumbai and Dubai also aspire to be international financial hubs. India will grow its
manufacturing sector in a big way and make its presence felt in the export market. All countries,
including Singapore, will have to adapt to these realities.
Domestically, we have other long-term headaches. We are facing a demographic crunch, with a
rapidly-ageing population and a declining birth rate. Our people are increasingly mobile. In a
borderless world, ensuring that our best remain rooted to Singapore, physically and emotionally, will
be a challenge.
Despite these challenges, I am optimistic about our prospects. I base my optimism on our
fundamentals. We have two basic strengths - good governance and our ability to nurture and attract
talent. Good governance and talent form a virtuous cycle for sustaining economic growth. Let me
elaborate.
First, good governance. A World Bank Institute report released in September 2006 ranked Singapore
among the top 10% of countries around the world with good governance. Good governance is
possible only if you have an honest, capable and committed government. In our case, the government
must, in fact, be exceptional to overcome the exceptional challenges faced by Singapore, given our
land and space constraints and geopolitics.
For the next decade at least, I do not see any danger of a drop in the quality of our governance. The
new team under Prime Minister Lee Hsien Loong is firmly in place. It has the drive and solutions to
bring our economy forward and the wisdom and compassion to help all Singaporeans. The
government is paying particular attention to those in the lower-income group to help them and ensure
that they, like the rest of Singapore, benefit from globalisation. It is a strong and pragmatic government
with integrity and sound values. It gives the country a clear sense of direction, anticipates and solves
problems, rallies the people towards common goals and takes care of all Singaporeans.
The challenge for Singapore is how to keep on producing an exceptional government. Without
exceptional government, Singapore will lose its influence internationally, become a mediocre country
and be marginalised.
This brings me to the second critical success factor - talent. While good governance provides the
necessary conditions for growth - political stability, social harmony, justice and equal opportunities -
what drives the economy and Singapore forward is talent. We need talent in the public and private
sectors, in the arts and the social sector, in government institutions, in NGOs and the people sector,
and in business and the economy. Countries now actively compete for talent to power their economy.
They want to attract foreign talent while retaining their own. Even China which has 1.3 billion people
wants to attract back its overseas Chinese talent and import foreign talent.
To ensure that Singapore continues to have a strong talent base, we have to build, attract and retain
talent. We will continue to invest heavily in our people, especially our young, and equip the next
generation with the right skills and cutting edge knowledge. We will continue to welcome global talent.
To enhance Singapore's magnetic pull, we are developing Singapore into a truly global city - a "cool"
and "happening" place, with social and cultural vibrancy, good educational institutions, clean, green
and safe environment and iconic international sporting events like F1 Grand Prix. But the strongest
pull in this magnet is economic growth. Without economic opportunities, talent will not come or stay.
What of the future?
We did not foresee the Asian Financial Crisis coming in May 1997. Despite keeping a close watch, we
may still miss something or misinterpret a blip on the radar screen. This is why I have emphasised the
importance of maintaining the virtuous cycle of good governance and talent to generate growth. This is
the best strategy to face whatever challenges ahead. Sustaining this virtuous cycle must be the task of
all Singaporeans.
Let me now say a few words about how I see the role of the SICC in Singapore's future development.
Given the diverse markets in which SICC members operate, your chamber can play an important role
in helping our companies internationalise and seize global opportunities. The SICC can help your
members move into new areas of growth like the Middle East. I am glad to note that more links and
collaboration are being forged between SICC and your counterparts in the Middle East. We have just
witnessed the signing of MOUs between the SICC and the Riyadh and Abu Dhabi Chambers' of
Commerce and Industry.
I also encourage SICC to collaborate with IE Singapore and the Singapore Business Federation to
organise more networking platforms to forge partnerships between foreign and local companies. For
instance, given our knowledge and connections, Singapore can serve as a bridge for Middle Eastern
investors interested in going into China.
Finally, let me once again congratulate the SICC on your 170th Anniversary and wish the SICC and its
members continued success.
Thank you.