Ailing Asia will soon be up and running

Business Asia, Nov 2, 1998 by Lee Yock Suan

Following are excerpts of an address by LEE YOCK SUAN, Singapore's Minister for Trade and Industry, at the recent Australian Summit in Melbourne

Asia's financial crisis has been thoroughly analysed, although experts will continue to dissect it for years to come.

The underlying causes are well recognised. Exchange rates pegged to the strong US dollar, massive flows of short-term funds, weaknesses in the banking sector and excessive investment in capital assets have all contributed to the crisis.

The future economy will depend increasingly on information and knowledge workers to create wealth rather than on material resources or capital.

Building on our strong economic fundamentals, and supported by high value-added manufacturing and hub services, Singapore aspires to become a knowledge-based economy where the ability to acquire, process and apply knowledge and information will be a key competitive advantage.

Let me share with you some strategies that: we have identified for Singapore's development over the next decade.

We will develop manufacturing and services as the twin engines of growth to create a resilient and balanced economy. With our successful industrialisation programme, Singapore has positioned itself as a key node in the global production network through our links to multi-national companies and by constant restructuring towards higher value-added activities.

In the coming years, manufacturing will remain a key pillar of the economy, accounting for about 25 per cent of our gross domestic product (GDP).

We will include a wider spectrum of activities ranging from research and development, design and production to marketing and distribution.

In the area of services, Singapore has invested heavily in strengthening our traditional service sectors such as trading, shipping and port services over the past 30 years.

We have also been successful in developing new high-growth areas such as financial services and telecommunications. Financial and business services now contribute a larger share of our GDP than manufacturing.

We will build up our capabilities in emerging areas like healthcare, education, IT and media services. This will enable us to develop into a premier services hub. A second area relates to the development of our human and intellectual capital.

A key competitive advantage in a knowledge-based economy is the availability of a sizeable pool of talent and skills.

We will invest heavily in education and equip every student with computer skills.

As our economy restructures, we will retrain and re-skill our workers, especially the older and less well-educated ones, to prepare them for new types of jobs

A third strategic thrust concerns science and technology. High growth industries typically have short product cycles. The rapidity at which products and services change is the very source of growth and opportunity.

We aim to develop our indigenous science and technology capabilities so as to enhance our manufacturing sector as one that is skill and knowledge intensive. As our resources are finite, our R&D efforts will be directed at areas where we have already built up some world standing.

My belief is that the regional crisis does not spell the end of Asia's economic growth and progress.

Severe though the financial turmoil has been, it has not swept away the fundamentals that made Asia successful in the past three decades.

Asia may be recuperating at the moment, but we can still run fast. Our limbs are long and we have speed and stamina. And once we have regained our breath, we will run again.