Published January 22, 2009

Unusual Budget for unusual times: PM Lee

It will aim at keeping businesses afloat as Singapore prepares for long, bleak spell

By CHEN HUIFEN

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(SINGAPORE) Prime Minister Lee Hsien Loong has indicated that this year's Budget will be an unusual one, set against the backdrop of unprecedented economic circumstances and expectations of a protracted downturn.

At a gala dinner last night to mark the 10th anniversary of the Singapore-MIT Alliance, he told an audience of academics and graduate researchers that it 'is not going to be an ordinary Budget - because this is not an ordinary year - either in the content of the Budget or its overall fiscal stance'.

'Its focus will be to keep businesses afloat, so that they can provide jobs for Singaporeans,' added Mr Lee. 'And it will include special schemes to help businesses to reduce their costs, and maintain access to urgently needed financing. And there will also be measures to help households, especially needy households.'

He said that Singapore needs to prepare for a long downturn, and possibly several years of slow growth thereafter. The bleaker outlook had already been announced earlier in the day by the Ministry of Trade and Industry (MTI), which lowered its growth estimate for the year to between minus 5 per cent and minus 2 per cent.

'It's unprecedented, but if it materialises, we will see our worst economic performance in decades this year,' said Mr Lee.

Although the Budget will not turn the situation around overnight, Mr Lee said it will help Singapore to tide over the difficult period and emerge stronger. He also assured steady investments in education and R&D, to build new capabilities and to ensure that Singapore improves its competitive edge for the future.

Singaporeans must also not lose sight of long-term opportunities.

'Asia is the place where the world's growth has been and will continue to be, after this storm has passed,' said Mr Lee. 'When the clouds clear, as they eventually will, Singapore must be well-positioned to grow at the heart of Asia again.'

Pointing to the Singapore-MIT Alliance as an example, Mr Lee said the partnership between Singapore's National University of Singapore and Nanyang Technological University and the USA's Massachusetts Institute of Technology was formed at a time of difficulty, during the Asian financial crisis. But the partners decided to press on with the alliance despite the uncertainties then, leading to successful collaboration and growth of talent exchanges over the years.

Its success also opened up new joint commitments. One is the Singapore-MIT Alliance for Research and Technology Centre (Smart). To be located at the new NUS University Town, it will be a hub where researchers and students from the three universities can teach, share ideas and interact freely.

'In good times and bad, we have continued to enhance our infrastructure, attract talent and invest in education, and increasingly in recent years, in research and development,' Mr Lee said, at the dinner held at The Ritz-Carlton Millenia Singapore. 'Even now in the midst of crisis, we will persevere with measures to strengthen our resilience and competitiveness, and look over the horizon, to prepare for opportunities which are still there, especially for the watchful and well-prepared.'