Singapore: Global downturn will not stop growth over 5-10 years.

Nov 12, 2007

Global downturn 'will not stop growth over 5-10 years'
MM: Investments such as integrated resorts, F-1 race will help sustain S'pore

MINISTER MENTOR Lee Kuan Yew believes Singapore could face inflation and a recession in the next five to 10 years. But despite these looming dark clouds, he is confident Singapore will continue to grow.

The reason: the country's good government which has snagged several billion-dollar projects like a $6.3 billion solar plant project. Hence, he assured Singaporeans they 'will not starve'.

Yesterday, Mr Lee gave his upbeat view of Singapore in the long term at an annual ritual he introduced in 1971 - Tree Planting Day.

This year, he was at Queenstown, part of his Tanjong Pagar GRC, to lead the event to green Singapore. There, he surveyed the new Alexandra Canal Linear Park, built over a canal. A book on Queenstown - Singapore's oldest housing estate - was also launched.

In a 35-minute, off-the-cuff speech in English and then Mandarin to residents, Mr Lee first noted the Government's plan to 'beautify' Singapore in the next five to 10 years. Using the same timeframe, he then spoke at length on Singapore's growth in the global economy as he issued a warning.

'We are doing fine, we're likely to do well, but there are dangerous market signals,' he said.

He cited especially oil prices, now nearing US$100 (S$144) a barrel, which he finds unbelievable.
In response, the United States is looking to turn corn into ethanol, an alternative source of fuel.

This has a domino effect on food prices.

'When you turn food into energy, food prices go up. When you have grain turned into something else, (prices of) chickens go up, pigs go up.'

'So there's a real possibility that a year down the road, prices go out of control, America goes into recession, stop buying so much, China stops exporting so much, India stops exporting, we also stop exporting so much...

'Please remember don't just believe that everything is just going to go up and never come down,' he said.

However, MM Lee is confident Singapore will come through the turbulence in top form.

He pointed to several major investments already snagged: the integrated resorts, a $6.3 billion Norwegian project to build the world's largest integrated solar plant, ExxonMobil's US$4 billion petrochemical plant and Formula One racing.

'So...even if the world economy goes slowly down, the construction work that goes on with these investments and the two Integrated Resorts and Formula One and the hotels, you will not starve,' he said.

'With these investments on the way I think five, 10 years, yes, there can be inflation, we are in trouble, recession comes in, one year, two years, but Singapore will grow.'

He credits it to Singapore's good government. 'Stability depends on good living conditions. That depends on good business which depends on good government.'

This dependence of one on the other is why, Mr Lee said, he keeps reminding Singaporeans the country's good fortunes were not a matter of chance but careful planning by a good government.

This, in turn, is made possible by the political system, such as Group Representation Constituency (GRC), he said, which ensured men of talent and integrity could get in.'If you have any stake at all in Singapore, you stick with the GRCs and stick with the PAP.'