[b]Singapore's longer-term worry is talent: SM Goh
Posted: 06 July 2007 1547 hrs [/b]
Senior Minister Goh Chok Tong
Singapore's current property bubble is a short-term phenomenon that
is not a cause for worry, said Singapore's Senior Minister Goh Chok
Tong, neither is rising costs as it will mean a higher standard of
living and more income in real terms.
The real longer-term worry is its talent pool and how Singapore
will grow.
Making these points in an interview brodcast by CNBC as part of a
special report on the anniversary of the Asian financial crisis, Mr
Goh - who was Prime Minister of Singapore at the time - said he
would not have done anything differently as Singapore did the right
thing at that point of time.
Reflecting on the period, he said the main worry 10 years ago was
whether the crisis would engulf Singapore or instil a sense of
confidence in people.
Mr Goh said: "Once we have taken note of the whole situation,
knowing that internally, our economy is strong, we were not too
worried. We knew that we could survive.
"So, the most difficult thing was to give confidence to
Singaporeans that we can survive the crisis. Thats where the
cost-cutting measures amounting to some S$10 billion was a very
important move on our part. Its to restore confidence not just
amongst investors, but amongst Singaporeans that we could withstand
the crisis."
Mr Goh added that one of the big lessons was the need to have a
strong financial sector.
He said: "We realized very much earlier that the financial industry
is a global industry and therefore, youve got to be more aware of
whats happening in the world and in the region, in
particular.
"So youve got to set up, not just internally but also externally,
a system of regional surveillance of the financial performances of
banks outside Singapore too. In other words, it requires
cooperation from other countries as well."
He is also confident that an Asian financial crisis will not happen
again since within Asia, banks have become much more transparent,
with the regulatory authorities having become much more aware of
the importance of transparency and good corporate governance.
There are also regular meetings, revealed Mr Goh, to ensure that if
something does happen, others will be alerted and together action
can be taken, such as the Chiangmai Initiative where countries met
and agreed to have currency swaps between them, with a certain
amount of their reserves set aside for this purpose.
Turning to domestic issues such as Singapore's rising costs, the
Senior Minister said costs are always a factor and the government
does worry about it.
"We do monitor inflation. Costs - we do worry. But that means
youve got to move into higher value-added industries, like
biomedical services and financial services, education, health and
so on," said the Senior Minister.
"We cannot be doing things which we were doing before 1997, where
China and India will become much more competitive. So, costs are
always important, but we are not going to allow costs to prevent us
from growing. Just move into the right sector," he added.
Mr Goh said that his concerns for Singapore now are on the next lap
for the country and not centered on the active property
market.
He said: "The prices are at the higher end. We watch very closely.
Prices for the middle-income and for the HDB heart-landers - prices
there are still quite affordable for Singaporeans in general.
"So, my worry will be where do we go from here? Its a longer-term
worry. Its not a short-term worry. It comes back to my point about
talent. For Singapore to grow, you need talent, talent from
Singaporeans or within Singapore and talent from outside."
The Senior Minister went on to say that though Singapore is a small
country and there are always other economic competitors globally,
time will hopefully develop in Singapore a confidence that it can
survive, whatever the problems that may come.
