1. Singapore has had a turbulent and challenging year. In January, dark clouds had gathered all around us. Our economy was hit by the worst storm in our history. Exports went down by a third, and manufacturing declined sharply, since we produced for world markets. Given this backdrop, we projected GDP to shrink this year by 6% to 9%.
2. We could not avoid the storm, but we did not passively resign ourselves to fate. Instead, we mobilized Singaporeans to tackle the crisis together. We brought the Budget forward to January, implemented a Resilience Package, and drew on past reserves to help fund the Special Risk Sharing Initiative and the Jobs Credit.
3. We are now in a stronger position. The global economic situation has somewhat stabilised. Our measures have cushioned workers from the worst of the storm. Our economy was among the worst hit, yet we still have one of the lowest unemployment rates in the world. Singaporeans too have responded resolutely and cohesively. These factors helped the Singapore economy to bounce back strongly in the second quarter. As a result, growth in the first half of the year was -6.5% – a very significant contraction, but less bad than we had feared. Hence we have revised up our growth projection for 2009. Our economy will still shrink, but “only” by between 4% and 6%.
4. But it is too early to celebrate. The outlook remains clouded. The advanced economies are not expected to bounce back soon. Our exports remain much lower than last year, and companies like SIA are still facing very tough conditions. We might see another wave of retrenchments later in the year. So we must stay on guard for more challenges to come.
5. Beyond this year, we expect the global situation to remain difficult for some time. But the adverse external environment does not mean that Singapore cannot grow. We can and must look for new ways to develop and prosper. Opportunities still exist, especially in Asia, but we need all our ingenuity and resourcefulness to find and exploit them.
6. Businesses and workers are already adjusting to the new world. Many firms are changing their business processes, finding innovative ways to cut costs and generate revenues, and aggressively seeking out new markets. Workers are taking advantage of the SPUR programme to upgrade their skills and retrain for new fields. The unions are cooperating closely with employers to adapt to the changed conditions, instead of resisting change. We must keep this up.
7. In the midst of recession, as we tackle the immediate challenges, we must also look to the future. The Economic Strategies Committee is studying how we can transform our economy. The Committee will examine how Singapore can find new opportunities, build new capabilities, sustain balanced growth and overcome our constraints. We are involving the private sector, to gather the best ideas that can enable us to prosper. I am confident the Committee will have good proposals when it reports next year. Our responses in the crisis will ensure that once the US and Europe emerge from their troubles, and the world economy recovers, Singapore will forge ahead again in a dynamic Asia.
8. Up close, our current difficulties may appear daunting; but we should see them against a longer perspective. It has been 50 years since we attained self-government in 1959. Over this half century, Singapore has encountered many serious challenges – racial riots in the 1960s, oil shocks in the 1970s, a major recession in the 1980s, the Asian Crisis in the 1990s, the 9/11 attacks and SARS in this decade. Each time our people have rallied and prevailed, hence Singapore has continued to thrive and prosper, and arrived here today.
9. We did not start out as one people. Our forefathers were different peoples from different lands, who had come to Singapore to seek better lives for themselves and their children. But our formative years fighting for independence, then striving as a new nation to survive against the odds, brought us closer together. Each time we were challenged, we responded as one, everyone pulling together and working for the common good. And each success further cemented our cohesion, and helped us to meet the next challenge.
10. We are doing this again in this crisis. Everyone of us – government and people, employers and unions – is working together, keeping companies viable and competitive, preserving jobs and livelihoods, and enhancing social safety nets like Workfare and ComCare. Even though this crisis may be a severe test, but our history and record give us confidence that we will once again turn it into an opportunity to strengthen our social compact, and upgrade our economy.
11. We have responded to the outbreak of Influenza A(H1N1) in the same way. We worked hard to delay and slow down the spread of the new virus in Singapore. Our efforts depended not only on the healthcare system and professionals, but also on citizens being vigilant and socially responsible. We bought ourselves precious time to learn more about the virus and gear up our defences.
12. Whether fighting the recession or the flu, we made sure every Singaporean knows he is not alone, but that the community and the country are behind him. So long as you make the effort and do your best, the rest of us will help you to pull through.
13. This unity is key to our success in many fields. We must work hard to strengthen it, and to bridge potential divides within our society, be it between Singaporeans and new arrivals, between rich and poor, or most fundamental of all, between the different races and religions. We often see ethnic strife and religious conflicts in other countries. This last year alone, we have witnessed the Mumbai terrorist attacks, and the recent bombings in Jakarta. In Singapore we have to respect each other’s cultures, practices and beliefs, build trust and harmony between our communities, and gradually enlarge the secular common space which all groups share. In this way, we can become one people, one nation, and one Singapore.
14. We are well placed to deal with these challenges. We are not just pursuing economic growth, strengthening our society, or remaking our city, but creating a new Singapore.
15. We are improving our living environment, and developing better amenities for the community, more green spaces and park connectors. We are creating more avenues for students to advance and opening up more opportunities to go to university. We are building new hospitals, improving step-down care, and making healthcare more accessible and affordable to all. We are also revitalising the city – upgrading housing estates all over the island, refreshing our downtown into a premier shopping and entertainment venue, and creating a new skyline around Marina Bay, which is taking shape day by day.
16. My fellow Singaporeans, in the half century since we attained self government, we have been tested many times, but we have also created many possibilities for ourselves. Let us stand shoulder-to-shoulder, so that whether it rains or shines, we can work together and achieve the best results for Singapore. This is how we build a better and more vibrant nation, and make Singapore a special place that we are all proud to call our home.
17. I wish all Singaporeans a Happy National Day.