These were urgently needed measures, but their focus was on cost-cutting rather than capability building. For the long term, cost cutting alone is not an adequate strategy. So we are also making basic changes to strengthen our economy. We are emphasising worker training and education, to help us become a knowledge-based economy. Many of our workers are still unskilled or semi-skilled, particularly the older ones. With the help of the unions, we are getting them to undergo retraining and skills upgrading, so that they can do higher skilled, higher value-added jobs. Besides investing in our own people, we are seeking all the talent we can from around the world. To build a first class economy, with first class banks, companies, and government, we need top notch people. There are many talented Singaporeans, but not enough. We must find and deploy talent, whether Singaporean or foreign, to become a vibrant and dynamic city and outperform competitors. We are getting our organisations to emulate the best US MNCs, which induct talent from many cultures and countries, and meld them into a single cohesive management team. Singapore will be a place where opportunities abound, where able and enterprising people want to live, work and enjoy themselves, and where foreigners are welcomed and treated as part of our extended family. Besides upgrading the skills of our workforce and attracting foreign talent to Singapore, we are promoting entrepreneurship, particularly technology startups. We have launched a Technopreneurship  3  BIS Review 117/1999  21 programme.

Domestic institutional and regulatory frameworks were weak. Banking systems were poorly operated or supervised. Transparency and the rule of law were lacking. What the Indonesians termed KKN – corruption, collusion and nepotism – was accepted as the way business was done, rather than seen as a serious flaw to be put right. But the crisis cannot be blamed solely on its victims. It was also aggravated by weaknesses in the international financial structure. Unsound loans required imprudent lenders, or at least over-confident ones. The sustained Asian boom caused investors and lenders to over-reach themselves. When problems surfaced in Thailand, they stampeded for the exits across the board, creating a self-fulfilling panic. Non-Asian emerging markets, and even some developed world markets, also came under pressure. The problem was not just Asia. Recovery of the region Now, two years later, the Asian economies are stabilising. Macro-indicators show that the worst has past, much sooner than many expected, and the near term prospects are quite good. Throughout the region, exchange rates have stabilised. Inflation has subsided. Governments have eased monetary policy and lowered interest rates. Financial systems are flush with liquidity. Consumer sentiment has improved, and private consumption has recovered to pre-crisis levels. Exports are recovering, underpinned by the belated revival in Japan’s economy, and continued strong demand from the US. Electronics and semiconductor exports are doing particularly well, helped by an upturn in the global electronics cycle. Strong domestic consumption and export performance have stimulated industrial production. Inventories and over-capacity have fallen throughout the region.