1. The Year of the Rat ended on a difficult note for Singapore. The global financial problems have precipitated a worldwide recession. The last few months have brought a steady stream of worsening news in the US, Asia and Europe. With all our major markets in decline, our exports are falling sharply. We have had to revise our growth estimate for 2009 down to between -5% and -2%, the worst economic outlook since independence.

2. The Government has just presented its 2009 Budget, and delivered a “Resilience Package” to help Singaporeans in this difficult period. On top of tax measures and business grants, we have announced two special schemes to tackle the crisis – a “Jobs Credit” to help companies with their wage costs; and a “Special Risk-Sharing Initiative” to help them keep their access to much-needed financing. These measures will help businesses to stay afloat, so that they can continue to provide jobs for Singaporeans. We will also give additional support to households, with more for low and middle income families. Hopefully, with some Government help, Singaporeans can continue to provide for themselves and their families.

3. To tackle this unprecedented economic crisis, we are for the first time seeking the President’s approval to draw on our reserves. This is a major decision, which the Govern­ment has thought over very carefully. Our reserves are a key asset for Singapore. We have built them up patiently over the years, so that in a critical situation we have the wherewithal to mount a vigorous response. The present crisis is clearly such a moment. By using our reserves for the two special schemes, we are making clear that we intend to respond to the crisis decisively and with all means at our disposal.

4. We are able to do this unlike most other countries, because we have prudently saved and invested our surpluses over many decades. We must therefore maintain these critical instincts. When things return to normal, we must resume our habit of putting something aside in the reserves whenever we can. Then when we next face a serious crisis, which is bound to happen one day, we can again meet it with confidence.

5. These Budget measures will mitigate the downturn, but they will not instantly lift the economy from recession. No government package can do that. The recession is a global one, and we must expect to see exports contract, unemployment rise, and growth remain negative for more months, and perhaps for the whole year.

6. We must brace ourselves for a challenging Year of the Ox. But there is no need to be despondent. Singapore has strengths which will let us outlast this recession. We have the resources, the programmes, and the tenacity to ride the storm. In the Chinese zodiac, the ox symbolises fortitude and hard work. It is not a fast or aggressive animal, but is strong and completely dependable. In the same way, we can see through the year with quiet resolution.

7. For all that the Government is doing, we must remember the important roles that the community and family play in helping us weather the crisis together.

8. Community and welfare organisations are expanding their schemes to help more needy Singaporeans. Grassroots organisations are also coming up with new and innovative ways to help residents. In Yio Chu Kang, grassroots leaders regularly organise “Rice Parties” to provide needy residents with rice, rations and NTUC vouchers. Other constituencies provide free hawker meals, or run “Sunday Markets” where unemployed and low-income residents can set up stalls and earn some money for themselves.

9. The Government will support such community efforts. We are giving voluntary welfare organisations and self-help groups more funding to do more good work. We have also increased tax deductions for charitable donations, to two-and-a-half times the donated amounts. I encourage Singaporeans to continue giving generously to worthy causes in this downturn. With many helping hands, every Singaporean can survive the storm.

10. The family is our most important life-raft in times of crisis. When we face difficulties, families give us comfort, hope and practical help. In these hard times families must draw closer together, including our extended families.

11. Singaporeans instinctively understand this. A recent survey by OCBC found that this year the top three Singaporean dreams were starting a family, settling down and buying a home. In contrast, last year’s top three dreams were seeing the world, self-improvement and making money. Amidst uncertainty and turbulence, priorities have shifted from personal wants and ambitions to home, relationships and family.

12. Indeed, the family unit is the bedrock in all communities, whatever their race or religion. The world may have changed drastically, and Singaporeans may be better educated and more affluent. But the family will always be core to our human instincts and our social fabric. In this festive period, let us remember that Chinese New Year is a time for togetherness. It is the time for families to come together to rejoice in the company of their loved ones and to build lasting memories and bonds.

13. Even in hard times, we should not neglect the need to bring up a new generation. At the National Day Rally last year, I showed a chart of Singapore’s total fertility rate over the years. If you remember, every time there was a recession, birth rates went down. But I hope this time we can buck the trend and keep the birth rate steady. We have implemented many measures to encourage marriage and help you in supporting and bringing up your children. There is also a lag time in procreation, so with luck your babies will arrive in time to enjoy the upswing. What really matters is the prospects in Asia and in Singa­pore over the next decades, which I believe are still bright despite the current gloom.

14. Meanwhile, let us be grateful for what we have in Singa­pore – a stable society, a sound economy, and a reputation which draws talent, investment and jobs to our shores. We must continue building on these strengths, so that we will emerge stronger from this crisis, ready to thrive in what will be a very different and more challenging world.

15. I wish all Singaporeans a Happy Chinese New Year.