36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963.

Tel: 3757794/5

___________________________________________________________

It is my pleasure to join you this evening to celebrate our 34^th National Day. Last year, when we met at the National Day Dinner, our country was in the midst of an economic crisis. One year has passed since then. Though there are indications that our economy may be recovering, we should learn one important lesson from the current and the 1985-86 economic downturns, that is, success and prosperity cannot be taken for granted.

2 Even if the economic recovery can be sustained such that our country again enjoys steady growth, we should realise that high growth of the pre-1997 period is over. Indeed, competition in the 21^st Century would be keener, both from lower-cost neighbours and technologically more advanced countries. We have to now look beyond the current economic performance and set our eyes beyond the horizon at the challenges and opportunities that lie ahead. We have to ask ourselves how our economy can remain competitive and find a niche in the global economy, and how our people can continue to enjoy success and prosperity in the 21^st Century.

4 First, we must maximise the talents of all Singaporeans. Singaporeans must be given every opportunity to do their best. Our Government is committed to developing each and every Singaporean to his fullest potential, through education and lifelong learning. The Government is reviewing Singapore’s education system to ensure that every child will be computer literate, and to nurture thinking and creative skills in the younger generation. The Government has also pledged $220m to the Skills Redevelopment Programme to help our workers learn new skills and find new jobs.

5 Nonetheless, for Singapore to succeed in the 21^st Century, it is not enough to just develop local talents. We must attract foreign talents too. Singapore is a small country with an indigenous population of about 3 million. Our population base is too small to generate a large pool of local talents.

6 We must tap the best talents from around the world to complement our local talents. We need foreign talents to help us grow the economy, create jobs through their investments, expertise, experience and linkages, and help us strengthen our international competitiveness.

7 Some Singaporeans may feel uneasy or even threatened by the presence of foreign talents. I understand their anxiety. But let us not forget that we are benefiting from the extra cutting edge to our economy from foreign talents. They help us to create jobs, not take away jobs. Getting foreign talents is to protect Singaporeans' interest. We need to change our attitude and mindset towards them.

8 Singaporeans must rest assured that the Government's main concern is in fact Singaporeans. This should be obvious and natural. It is the Government's responsibility to look after our own people. The Government will make sure that our own people are always treated as "native sons" of this land.

9 The Government uses market forces to create wealth, but it uses social principles to distribute wealth. Social programmes and subsidies normally favour citizens. For example, under our public housing programme, citizens enjoy subsidised public housing when they buy or rent flats directly from the HDB. Even when they buy from the open market, they enjoy housing grants if they are first-time applicants. Currently, the grants are $45,000 when they live near their parents and $35,000 when they do not.

10 Another example: education for Singapore citizens is heavily subsidised. Singapore citizens in primary school do not pay any school fees while non-citizens pay as much as $80 a month. In government and government-aided secondary schools, it is $5 a month for citizens and as much as $130 for non-citizens. In Junior Colleges, citizens pay only $6 a month while non-citizens have to pay as much as $240.

11 In addition, the Government also shares wealth with our citizens through various Asset Enhancement Schemes. Our people enjoy ad hoc CPF top-ups from the Government and own shares in major Government-owned companies through the Share Ownership Top-up Scheme.

12 Subsidies and grants are given to improve our people's living environment, and enhance the value of our properties through upgrading programmes and improvement works of HDB and the town councils. Similarly, donations to the Community Development Councils (the CDCs) enjoy matching grants from the Government, 4 to 1 matching grants for residents' donations through GIRO and 3 to 1 for other donations. The matching grants enable the CDCs to carry out more activities for the community. These activities aim to foster social cohesion and nurture a sense of belonging, ie the Singapore heartware.

13 All these are examples of how the Government looks after its own people and how citizenship brings with it privileges. But the Government would not be able to implement these programmes and provide these subsidies if our economy loses its competitiveness. Attraction of foreign talents should be seen from this macro perspective.

14 The recent economic crisis has demonstrated to us and the rest of the world what Singapore has achieved over the last 34 years of nation building: good government, sound institutions and a strong unspoken social contract between the government and the people. Our economy is able to turn around quickly because the people trusted the government to provide the leadership and to make the right decisions, and the people cooperated with the government to make the necessary sacrifices to get us out of the economic crisis. Together, we did it in 1987; we have done it again in 1999.

______________________