SUPPORT FOR MRS LEE : 'May I take this opportunity through the media to thank the many well-wishers who have sent me e-mails, letters, cards, flowers and fruit to wish my wife well. I am deeply grateful for their warm support.' - MINISTER MENTOR LEE KUAN YEW, 84, speaking at the Tanjong Pagar GRC Family Day. Mrs Lee, 87, suffered a stroke on May 12 and underwent surgery on May 17 and had been under close observation.

At the same time, there are Singaporeans who want subsidies for a range of items, from rice to bus fares.

But Minister Mentor Lee Kuan Yew made clear yesterday that subsidies are no way to solve problems caused by rising costs.

He argued that subsidies reduced the incentive for people to be competitive - which is what is needed to keep the economy growing in order to better pay for costlier essential items:

'As long as we have a dynamic economy, we can solve our problems. Subsidies cannot solve them.

'I read the newspapers and the simplest thing is to write and say, subsidise. Rice, oil, bus fares, even putting seat belts on school buses. That is the surest way to go downhill.

'Multiple subsidies have led to a welfare system that has trapped Europe in slow growth. Europe's welfare systems have lowered incentives for people to strive and to excel.'

Speaking to 6,000 constituents at the Tanjong Pagar GRC Family Day at the Queenstown Stadium, he dwelt on why the problem of rising costs is here to stay and how Singapore plans to deal with it.

He noted that the consumption of oil had risen, with few new oil discoveries. And as once-poor countries like China and India prospered, they needed fuel to make goods to export.

The world's population, now over six billion, is forecast to hit nine billion by 2050. But climate change is drying up agricultural areas.

'What are we going to do? We can see the signals,' he said.

'We can't grow tapioca, or corn; we can't compete in making Nike shoes or sewing gowns. We have to move up to more complicated jobs and services.

'We have to earn enough money by working hard and smart in manufacturing and services to pay market prices for food, rice, wheat, maize, vegetables, fruits, fish, meats, chicken and eggs.'

Because with a good currency, 'however much the price of rice goes up, or meat, or whatever, we will not go hungry'.

Singapore had to remain a competitive society to generate growth.

'The Government must ensure that everyone has the highest-paid job he is qualified to do. If his salary is below the minimum for a decent life, the Government will top up with Workfare,' he said, referring to the national income supplement for low-wage workers.

And if people know the cost of what they consume or use, they will spend their money 'more to (their) benefit', he said, instead of over-using or abusing subsidised items which they did not know the real cost of.

Mr Lee said neighbouring countries now had to grapple with the economically-necessary task of cutting fuel subsidies. In Indonesia, for example, there were riots.

But he noted that opposition leaders there also encouraged demonstrations over the cuts and rising food prices to weaken the chances of President Susilo Bambang Yudhoyono winning re-election next year.

'In Malaysia, determined efforts by former PM Mahathir to unseat PM Abdullah Badawi have not weakened his (Abdullah's) hold on the reins of power because he commands a decisive majority in Parliament, just short of two-thirds,' he added.

'But not to upset the electorate, his government has not reduced the subsidy on oil.

'Of our other neighbours, Thailand faces the danger of another coup. In the Philippines, charges of corruption hover over President Gloria Arroyo, damaging for investors and the economy.'

Citing recent natural disasters in Myanmar, he said Singapore had 'no earthquakes, no tsunamis, no typhoons because of our favourable geographic location'.

'Let us be grateful that we have long-term stability and therefore continuing high-value investments and good growth,' he said.

'In five years, we will have a more lively and beautiful city.'

He was also confident that other big cities in Asean - Bangkok, Kuala Lumpur, Jakarta, Manila, Ho Chi Minh and Hanoi - would flourish with the advent of the Asean free trade area and other free trade pacts.

MM Lee then apologised to the audience for not being able to speak too long last night, as he had a 'bad throat' and is scheduled to take the stand in court today.

The hearing is to assess damages that Singapore Democratic Party chief Chee Soon Juan, his sister and the party have to pay for defaming Mr Lee and Prime Minister Lee Hsien Loong in 2006.

'I've got to save part of my voice to let him cross-examine me,' Mr Lee said. 'Of course, in the course of the cross-examination, I have a few things to say.'

zakirh@sph.com.sg