Singapore Government Press Release

Media Division, Ministry of Information and The Arts,

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

Tel: 3757794/5

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  1. SPEECH BY SENIOR MINISTER LEE KUAN YEW AT THE TANJONG PAGAR 34TH NATIONAL DAY CELEBRATION ON SATURDAY, 14 AUGUST 1999, AT THE TANJONG PAGAR COMMUNITY CLUB

 

Two years after our downturn in 1997, it seems the worst is over. The economies of our neighbours have improved, and so have ours.

Continuing recovery depends on two factors; first, the US economy. If the US stock market Dow Jones Index were to plunge, stock markets, property values and liquidity throughout East Asia will be badly affected. Second, that the Japanese economy does not go down again.

They are matters beyond our control. What is within our control, we have managed firmly and intelligently. As a result, Prime Minister Goh Chok Tong and his ministers have high credibility. This is their first major crisis since they took over in 1990 and they have passed with flying colours.

The most important decision taken was to cut down costs. Our exports were losing as against Mexico, China, South Korea and the Philippines. With the co-operation of the trade unions, we trimmed business costs by cutting the employerís CPF contribution by 10% and reducing rents and other fees. Very few governments could do this without protests and resistance. This move slowed down the relocation of many industries, and reduced retrenchments.

All countries in East Asia have suffered negative growth in 1998, except Taiwan and Singapore. We come out of this test as a government and people who have the courage and decisiveness together to take the painful steps necessary to meet unexpected setbacks. This will make for more investments in the future. South Korea, Thailand, Malaysia and, especially Indonesia, will take some years to get back to the position they were in before this crisis struck them.

Mindset Changes

There are two important changes in attitudes we must achieve. First, to make learning a life-long process. In this era of fast-changing technology, there is no certificate, diploma or degree which can see you through a lifetime of employment. Knowledge and skills get outdated with rapid changes in technology. So whether you are a manager, engineer, accountant, professional, technician, skilled or unskilled worker, you have to keep on learning. The problem is greater for those with less education, because the training courses available are in English but their command of English is poor. So the NTUC, management and government must work together to get workers to improve their English for life-long training and retraining.

The things we do today our neighbours will be able to do at lower cost in five or more years. We must move on to more complex work using more complex machines and computers, always keeping ahead in our education.

  1. Standard English vs Singlish

On this subject of education, let me state clearly the disadvantages of Singlish. There are as many varieties of English as there are communities that speak English. In spite of differences in accent and pronunciation, people in Britain, America, Canada, Australia and New Zealand understand each other easily because they are speaking the same language, using the same words with the same grammar and sentence structures. Singaporeans add Chinese and Malay words into Singlish, and give different meanings to English words like "blur" to mean "blank". Worse, Singlish uses Chinese sentence structure. In fact we are creating a different new language. Each family can create its own coded language; nothing wrong with that except that no one outside the family can understand you. We are learning English so that we can understand the world and the world can understand us.

It is therefore important to speak and write standard English. The more the media makes Singlish socially acceptable, by popularising it in TV shows, the more we make people believe that they can get by with Singlish. This will be a disadvantage to the less educated half of the population. The better educated can learn two or three varieties of English and can speak English English to native Englishmen or Americans, standard English to foreigners who speak standard English, and Singlish to less-educated Singaporeans. Unfortunately if the less educated half of our people end up learning to speak only Singlish, they will suffer economically and socially. They want to speak better English, not Singlish. Those Singaporeans who can speak good English should help to create a good environment for speaking English, rather than advocate, as some do, the use of Singlish.

Let me tell you what we did about Mandarin. Twenty five years ago, we decided that we would not speak a special Singapore Mandarin, pronounced with Hokkien, Teochew or Cantonese accents, and with Malay words thrown in. To set the standard, I had our announcers on radio and television and school teachers retrained by teachers from Taiwan who spoke standard Mandarin. We also hired a few announcers for TV and radio from Taiwan to set the pace. Because we used standard Mandarin on TV, radio, and with teachers in schools, we now have a generation of young Singaporeans able to speak more of a standard Mandarin. The Chinese-speaking world outside Singapore can understand us.

We must take the same approach with English. Get our teachers retrained. Do not popularise Singlish. Do not use Singlish in our TV sitcoms, except for humorous bits, and in a way that makes people want to speak standard English. We will see a difference in another one generation. The people who will benefit most are those who can only master one kind of English. Singlish is a handicap we must not wish on Singaporeans.

  1. Global Competition

We are competing against other global cities, not just Kuala Lumpur, Bangkok, Jakarta, Manila, Hong Kong or Sydney. In banking, competition is already global; soon it will be so in many other sectors. We need top talent to be able to stay competitive.

Immigration into the US, Canada, Australia and New Zealand only became possible in the 1970s. Before that we could draw talent from the region. So our Chief Justice and Attorney-General, one born in Kuala Lumpur, the other in Ipoh, decided to settle in Singapore. Now we can no longer expect many like them.

Tan Cheng Bock (MP) believes that we have enough talent of our own, and gave the example of our bankers. He is wrong. Letís study DBS. John Olds is a top-class banker with worldwide experience in New York, Singapore, London, and a global network of connections with other bankers. Together with the chairman Dhanabalan, they have been able to recruit a team to restructure and transform DBS into a regionally competitive bank. Top men attract other potential top men. John Olds is not in DBS to create a dynasty. He has undertaken a job and wants to do it well. Hence he is recruiting the best he can find in the banking industry. Since this year, DBS has recruited 24 of the best foreign and local bankers to fill the top management positions of managing directors and vice-presidents of the various groups in DBS. The 8 foreigners are from banks in New York, London, Australia and Hong Kong. The 16 Singaporeans were working with foreign banks in Singapore, except for one from Keppel TatLee and another from OCBC. High calibre bankers are willing to join DBS because they see it has a future that will offer avenues for their promotion. Market analysts and investors have already given these moves the thumbs up. This is reflected in the higher rise in the share price of DBS, nearly 5 times its lowest price last year, compared to 3.3 times for UOB, 3.5 for OCBC and 4.5 for OUB (See Annex A for details and analystsí comments). The DBS team will have to live up to the marketís expectations. The other banks can catch up and close the gap if they too recruit talent with wide banking experience and restructure their banks to stay competitive.

Let me spell out our talent problem. Most of our scholars went into medicine, the law and engineering, but none into banking or finance because they were professions that were not open to our bright students. Even now our banks want to reserve their top jobs for the sons of the families that control them. Moreover we draw our talent from only 3 million people. A short mountain range is unlikely to have peaks that can equal Mt Everest. You need a long mountain range like the Himalayas unless you are a special people like the Jews in Israel. With a population of 4 million Jews, they have the talents of a population of more than 40 million.

Everyone knows that Shanghainese are the brightest and sharpest of people. But few know why. It is because for over a hundred and fifty years, ever since it became a treaty port for the foreign powers it has drawn the ambitious, energetic and talented from the Yangtze delta, Zhejiang, Jiangsu and other provinces along the river, a catchment of some 200-300 million. Even though Shanghai regularly loses leaders to Beijing, it still has an abundance of talent because it does not depend only on the 12 million in the city itself.

Similarly Hong Kong can afford to lose talent to America, Canada and elsewhere and still carry on. A Singaporean who has been in Hong Kong for 18 years in the banking business told me that there will be no shortage of talent in Hong Kong. He has seen dozens of sons of mayors of small towns in the Pearl River delta come to raise capital in Hong Kong. They are hungry, keen, smart and with connections in their home countries. They are future Li Ka-shings. Hong Kong is tapping into some 100 million people from the Pearl delta and the coastal region of Guangdong and Fujian.

Melbourne and Sydney have 20 million Australians to choose from, yet the ANZ Bank chose a Scotsman to be its CEO. This tells us something.

Tokyo attracts many of the ablest from the 120 million all over Japan.

Silicon Valley has 260 million Americans to pick from, yet nearly half its brains come from Asia, India, Taiwan, China, and other parts of Asia and the world. And American banks in New York have growing numbers of Indians and Chinese in their executive ranks. This is what it takes to be globally-competitive.

Unless we change our mindsets, we will be out of this race. We have to go out to tap talent. To get top talent, you must take in those who have not yet reached the top but are on their way up because when they are in their 30s we do not know which of them will make it to the top. You will only know when they are in their 40s, 50s and 60s. This is the way to protect our future.

  1. Annex A
  2.  

  3. Rise in DBSí Share Prices

 

Between 1 Jul 98 and 11 Aug 99, the share prices of the local banks hit their lows in September 1998. The share prices have since surged dramatically, with DBS leading the other local banks, as follows:-

 

 

Lows in Sep 98

(S$)

Closing Price on

11 Aug 99 (S$)

% Increase

DBS

3.56

17.20

383

OUB

1.535

6.85

346

OCBC

3.18

11.00

246

UOB

2.99

9.75

226

 

 

ANALYSTSí COMMENTS

 

 

  1. Excerpt from Credit Suisse First Bostonís report on Singapore banks, dated 9 August 1999

Credit Suisse First Boston recommends investors to stay overweight on shares of DBS Bank for the following reasons:

"We prefer DBS Bank for its 1) fundamental restructuring, and 2) new, energised management, on top of 3) the cyclical recovery. We expect that DBS Bankís valuations will continue to diverge from those of its peers." (Executive Summary)

 

2. Excerpt from Nomura Research report on DBS Bank, dated 2 August 1999:

"Recent hiring of experienced bankers adds more depth and breadth to the groupís pool of senior management. DBS may now have an advantage over its competition in this area." (page 1)

"Another positive is that the group is aggressively adding experienced talent to beef up its top management ranks. One recent example is the hiring of chief financial officer Jackson Tai, an American who spent 25 years with J P Morgan. This brings to six the total number of new hires in senior management in the past 12 months, including CEO and Vice-Chairman John Olds." (page 3)