so disparate? some of you might have watched the movie, " the good, the bad, and the ugly ", released, coincidentally, exactly 40 years ago. set during the american civil war, it was about three bandits who each held one clue to a hidden trove of gold coins. they did not trust each other, and wanted all the money for themselves. in the end, the " good " bandit who put all the three clues together won. discovering the secrets of economic growth is in a sense like looking for clues to a hidden treasure. we may each hold some clues but it is not easy to piece all of them together to achieve resilient growth. the title of the movie is also apt, i think, for categorising the growth experience of the 16 countries in my williams class. malaysia, which was represented in my class, enjoyed steady economic expansion of around 4 % to 5 % in real gdp per capita since the mid - 1960s. it obviously falls into the " good " category. i put india in the same category primarily because of its advances in the past 10 years. others like egypt, pakistan and honduras have stagnated. i would term their performance as " bad ". for all their efforts, their per capita gdp has not gone up much. but they are at least better off than others like bolivia and tanzania which have regressed, and are poorer now than they were in 1966. their record is " ugly ". why have countries travelled such divergent " good, bad and ugly " growth paths when they had all aspired for the same goal of a better life? in the past, economic theory has focused on the importance the williams college 16 were : singapore, malaysia, india, pakistan, philippines from asia ; egypt, ethiopia, kenya, liberia, tanzania, uganda from africa ; bolivia, colombia, honduras, mexico from latin america ; and yugoslavia from europe. of factor inputs, productivity and technology. of late, however, academics have started to recognise how critical leadership, politics, good governance and institutions are to growth. i believe that to trigger off and sustain economic growth, three necessary conditions are required : • first, vision and ideas ; • second, sense of reality ; and • third, good implementation as the first and second factors are related, i will discuss them together. vision and ideas and sense of reality first, vision and ideas. by this, i mean that leaders must offer a political and economic vision to ex

##cite the imagination of their people. they must offer hope and programmes to rally the people to sacrifice, struggle and work together to achieve a better future. second, by sense of reality, i mean leaders must have their feet firmly planted on the ground even as their imagination of growth and prosperity soars. in pursuing growth, sound basic economic principles such as prudent fiscal policies, monetary discipline, and high savings must be practised. many countries'experiences have reinforced the importance of a stable macroeconomic environment and the benefits of a market - based system. policies on growth must be applied to local contexts in a practical way, taking into account an economy's resources and constraints. in addition, countries must be open to new ideas and be prepared to change. they must not be trapped in old paradigms but must constantly adapt to the everchanging world. let me illustrate this with singapore's example. after independence, we implemented policies that promoted macroeconomic stability. we adopted prudent fiscal policies, and directed monetary policy to achieve medium - term price stability. our mnc - led growth strategy has worked well but others are pursuing the same strategy. so for the next phase of our development, we are also building a second platform based on entrepreneurship, innovation and knowledge. new areas of focus include research and development, biomedical sciences and the creative industry. as the competition intensifies, we break old moulds of thinking and reinvent the way we do things. for example, we overturned our longstanding policy of disallowing casinos in singapore. to remake singapore into a city with buzz, we are developing integrated resorts, with convention facilities, world - class entertainment and casinos. and crazy horse, the famed paris cabaret, is performing in strait - laced singapore. implementation is key the third critical aspect of growth is implementation. right policies are no guarantee of success, if the capacity to implement is missing. good implementation is founded on three key pillars : effective leadership, sound institutions and social cohesion. first, leaders are responsible for devising and implementing pro - growth policies. they must have the unifying vision to foster economic growth, the political will to overcome resistance and implement reforms, and the ability to mobilise people and engender social consensus. leaders must also have character, compassion, conviction, commitment and persuasive power. above all, they must enjoy the trust of the people. the second pillar of effective implementation is sound institutions. effective leadership must be supported