MM Upbeat As Fed Cuts Rate

Soure : TODAY, August 18, 2007

AT ABOUT 8pm on Friday, the sub-prime woes gripping the United States and the after shocks bleeding the world’s financial markets received a surprise lifeline when the US Federal Reserve slashed its discount rate by 0.5 percentage points to 5.75 per cent.

Less than an hour later, halfway around the globe, Singapore Minister Mentor Lee Kuan Yew had these words of assurance for his Tanjong Pagar residents: Don’t worry,
the “nervousness” in the financial markets would go away soon.

“Whatever the troubles, they will go away in weeks, if not months. What we are absolutely sure of (about) East Asia is that it is set to grow. Nothing will change the longterm plans and growth of China and India, and the rest of Asia,” he said at his constituency’s National Day dinner. Adding that the US and European markets were “beginning to settle down”, Mr Lee added: “Just in the last few weeks, trillions of dollars had been wiped out in the stock markets of the world. But it will come back.”

Mr Lee said that Singapore’s future is secure, at least for the next decade — not least because of the Republic’s domestic harmony.

“We have positioned ourselves well. When we say the Pledge, it’s not empty words. It’s real and it’s true. You can see around you: Equal opportunities and shared prosperity,” said Mr Lee, who added that the first generation leaders’ decision on adopting English as the country’s lingua franca has paid off immensely.

But while the “big pieces” are in place, Singapore is not without its problems —namely a shrinking, ageing population that is unable to support the growing economy

As the country turns to imported labour, this leads to another "huge" problem, that of income disparity, which the Government will tackle by supplementing workers' income and raising the value of Singaporeans' assets by rejuvenating Housing Board estates, said Mr Lee (picture).

"The economic growth is here to stay for the next 10, 15 years or more. Because of globalisation, our less-educated have to compete against the less-educated from China and India. (But) we will solve the problem as long as we have growth."

And to make sure Singapore's growth continues, it's important "to have MPs and Ministers who think long term and work long term". Which is why the search is on for the Republic's fourth generation of leaders, said Mr Lee.

"Before the next elections, the Prime Minister and his team must talent-spot and headhunt for candidates in their 30s and early 40s."

To drive home his point about the drastic changes taking place and their profound effects on the world, Mr Lee turned his attention to an issue half a world away: The melting of the polar ice cap in the Arctic.

"The Russians are claiming a big chunk of the ice cap. The Canadians also ... they say, as the ice melts, the ships will be passing Canadian waters," he said. "One quarter of the world's oil and gas may be under that ice cap. Countries ... around the Arctic will make their claims."

And amid the sea of changes, Singapore "cannot stand still", said Mr Lee. Its people must continue to put up with painful but necessary changes.

He added: "We have to make serious changes and hard decisions. We made the right decision from the beginning."