PM Lee said the recent unprecedented dip into the reserves and the $20.5-billion resilience package announced in the Budget were meant to absorb some of the shocks from the global economic slump. -- PHOTO: BT
THE Government will help buffer the impact of the downturn on Singaporeans and businesses, but Singapore will not emerge from the crisis until the global economy starts to heal, Prime Minister Lee Hsien Loong has said.
He made the point to the BBC in a interview aired on Thursday, during which he described the current downturn as 'the most severe' since World War II.
Singapore, which has an open and export-reliant economy, could not spend its way out of a recession, he indicated on the Asia Business Report programme.
The recent unprecedented dip into the reserves and the $20.5-billion resilience package announced in the Budget were meant to absorb some of the shocks from the global economic slump, PM Lee said.
The measures rolled out include a Jobs Credit scheme which subsidises employers' wage bills, and a Special Risk-sharing Initiative to help businesses get credit.
'They'll help us to reduce unemployment, reduce job losses. They'll help companies to remain viable but we must understand that what we can do is to buffer the impact,' he said. 'You must wait for the storm to pass.'
In the BBC interview, PM Lee said of the economic crisis: 'We've had ups and downs before, but this one is not only much sharper and deeper, but I think qualitatively different because it's a worldwide problem; it's not just a cyclical recession but a financial crisis of the whole global financial system.'
But he dismissed suggestions that regional countries were wrong to have depended on exporting to Western markets.
'We've had no choice,' he said.
'I mean, the whole world is plugged in as one globalised world. The consumption, the markets, are in America. India and China have been growing rapidly and their markets have been growing rapidly. But on a world scale, they are still very small, maybe one-third, one-tenth of the American and European markets put together.'
As for the paper losses suffered by the Government of Singapore Investment Corporation and Temasek Holdings, he said: 'Everybody has taken a hit whether you are Harvard, Yale, Stanford or the Norwegians. If you are in the markets, you have to ride the ups and downs.'
