Singapore prime minister warns of challenges in New Year

Business Materials 6 February 2008 04:51 (UTC +04:00)

( dpa ) - Prime Minister Lee Hsien Loong said Wednesday that Singapore must gird itself "for further uncertainties ahead" in the Chinese Year of the Rat amid turbulence in financial markets and a slowdown in the United States.

"As a small open economy, which imports almost everything we need, we cannot escape the global trend," Lee said in his traditional new year message.

Lee cited the progress of the city-state's economy last year, its fourth consecutive year of robust growth and the creation of a record 237,000 jobs.

The Year of the Rat begins on Thursday "under more uncertain and challenging circumstances" than the previous one 12 months ago.

"Turbulence in financial markets has shaken consumer and investor confidence," said Lee, son of Singapore's founding father Lee Kuan Yew.

"The US economy is slowing down, and possibly sliding into recession," he said.

The export-oriented city-state is still in a "strong position to weather any storm," Lee said.

Referring to the Chinese zodiac where the rat symbolizes wit, imagination and resourcefulness, Lee said, "Let us harness our creativity and ingenuity to tackle the challenges that lie ahead."

In the face of public concern over rising food prices, Lee said the government has the resources to help ease the burden on the poor and elderly.

The government cannot provide subsidies for basics such as rice and cooking oil as these will lead to "artificial shortages, queues and a black market," Lee noted.

He said rising costs are due to soaring food and fuel prices worldwide, trends Singapore cannot escape.