OUR FUTURE OF OPPORTUNITY AND PROMISE

I           Tribute to Goh Chok Tong

1          Friends and fellow Singaporeans, I've known Mr Goh Chok Tong for a very long time, more than 25 years.  We first met in 1978.  It was not long after he entered politics.  We met socially and I remember he was explaining to me how he was consciously staying away from making speeches on shipping matters because he was from NOL (Neptune Orient Lines) and he wanted to broaden out and talk about other subjects.  Soon after I met him, I went away to the US to study.  When I was away, I needed to make a presentation on Singapore – Know Your World – and wanted something to show the Americans what Singapore was like.  So, I asked Mr Goh and he sent me some slides of activities in Marine Parade, a kite-flying competition, something you won't find in America and it added something to letting the Americans know us.  I came back from America after two years in the SAF (Singapore Armed Forces).  He was my minister.  I would brief him regularly. Then I entered Cabinet and he was a colleague and then, he was the Prime Minister. 

2          When Mr Goh took over from Mr Lee Kuan Yew as PM, many people wondered how he would work out because Singapore had had only one PM ever since it was independent, in fact, ever since before it was independent.  What would the new PM be like?  Would he be his own man?  What mark would he put on Singapore ?  All this uncertainty was soon dispelled.  Chok Tong established his own style, milder, gentler, consultative and inclusive, but firm and clear.  He built his own team.  He retained key members from his own generation to help with the transition.  He brought in new and younger ministers and he got good men and women to work with him and formed a strong team.  And I'd just like to mention two of the people who kept on and stayed with him.  One is Mr Dhanabalan, who had actually gone into the private sector after the transition was completed and came back in again when I was ill with lymphoma in 1992 and took over from me in MTI (Ministry of Trade and Industry) and looked after MTI for one year, one crucial year, and helped out at a very difficult time.  And the other one is Dr Tony Tan, who also went out after the transition into the private sector, but came back in 1995 because Chok Tong asked him to help run Mindef (Ministry of Defence) for two years.  And he stayed for nine years and now, he's staying for another year to help me out with my transition.  So, I owe them a thank you. 

3          Chok Tong launched new policies to take Singapore forward.  Some were popular policies, like Edusave and Medifund.  Everybody liked them.  Some were difficult but necessary policies.  We had to cut the CPF (Central Provident Fund), we had to raise the GST (Goods and Services Tax), not popular, but we had to do it and Chok Tong sold these policies and persuaded people to do it.  Many things were in foreign policy.  He travelled, he made friends with foreign leaders, he established contacts, gained their respect and made use of these links for our advantage, for example, establishing many free trade agreements with important trading partners and I should just mention one, the US free trade agreement because that one was born on a golf course.  One evening after dinner, he persuaded Bill Clinton to play golf in Bandar Seri Begawan at night and over 18 holes, a free trade agreement was born.  So, that means he's telling me I should play golf. 

4          Chok Tong established his own connection with Singaporeans, not high-flown oratory, but sincere, direct, personal.  He made people feel comfortable and listened to.  He persuaded people to accept tough decisions.  He explained highly-sensitive issues and defused them and so, when we had dialogues discussing very difficult things, I was always very comfortable sitting next to him because I knew that no matter how difficult the subject, how awkward the question, how uncomfortable the audience, he would be able, with a soft turn of word, with a joke, with a nice question back, to put the audience at ease and get his point across.  And that's why when you see the pictures of me sitting next to him on a dialogue, I'm always smiling.  But following him on the National Day Rally all by myself here, well, that's a different show altogether.  But Chok Tong won the support of voters and the respect and the affection of Singaporeans and brought us all closer together as one people and, for that, I think we all thank Chok Tong.

II          Entering politics and becoming PM

5          I owe a personal debt to Goh Chok Tong.  I didn't plan to enter politics or to become PM, but he brought me in.  He guided me and supported me and especially over these last 14 years when I was his Deputy PM (DPM) and since coming in, politics has engaged all my energies and abilities.  It's what they call a 24/7 job, there's no running away from it. 

6          I've been part of a team dealing with many issues, big and small, and I've learnt much from the previous two PMs, especially not just to focus on policies but on how the policies impact people, the lives of individual Singaporeans, what does it mean, how does it hurt, where can we help.  So, I've always paid a lot of attention to my MPS cases, my Meet-the-People Session cases.  Nine out of 10 are routine, but always keep my eye open for that last tenth one where the policy has gone wrong, the implementation is not right or maybe the policy is wrong and has to be changed and we have to do something, intervene and put it right.  I won't tell you which ones otherwise you will all come and look for me.  But I have red stickers on my table so when such a case comes, I put a red sticker and I see to it personally.  I've learnt that not all problems can be solved, but some can and must and when you do solve one of these, it really gives you a high and it gives my helpers a high too.  It makes my evening worthwhile and then the next time you come back for the MPS, chuffed up, enthused, energised and we try again.  And when you have a long case, well, we sit patiently and we wait. 

7          It's a big step from being DPM to being PM.  It's not just working out policies or managing the economy.  It's really uniting all Singaporeans, making sure everybody knows and feels that we are on the same venture together and building our nation and making each generation of Singaporeans feel proud to be Singaporean, proud to carry that pink IC and that red passport wherever we go. 

III         Singapore at a crossroad

8          It's a unique challenge leading Singapore now, in 2004, because Singapore is at a crossroad.  It's a different world out there. It's a post-Cold War world.  What does that mean?  It means there's one hyperpower, the United States .  There's no two superpowers, it's not a multipolar world, it's one hyperpower.  China is rising, India is opening up, Southeast Asia is also growing in transition, but reasonably optimistic overall.  And one major reality out there is the war on terrorism which is going to continue for a long time to come. 

9          In Singapore , this is not just a change of the PMs.  It's a generational change to the post-independence generation.  It's a different generation of Singaporeans, different from the group which fought for independence, different from the group who grew up with independence in the immediate post-independence years who experienced the transformation, saw how Singapore changed, saw the effort and the passion which went into building Singapore, which went into achieving what we have and wanted to pick up and run and carry on with the job.  Now, it's a new generation and it's got to take Singapore another step forward, another level higher. 

IV        A fresh, bold approach

10        To do that, we need a fresh and bold approach.  We've been successful, wildly successful.  Otherwise, we wouldn't be sitting here today.  But we can't stand still because the world is changing, our people are changing and so must Singapore and so must the way we govern Singapore . 

11        To succeed, we have to balance between continuity and change, keeping what is still working and good and strong in our system, which is a lot, and changing the part which is obsolete, discarding the part which is no longer relevant, inventing new pieces, new ideas to deal with new problems and to take advantage of new opportunities and to develop new strengths and strategies to thrive in a different world. 

12        We can never afford to be satisfied with the status quo, even if we are still okay, even if our policies are still working.  People say, "If it ain't broke, don't fix it".  I say, if it ain't broke, better maintain it, lubricate it, inspect it, replace it, upgrade it, try something better and make it work better than before. 

13        I was a member of Chok Tong's team and I contributed to many of Chok Tong's policies.  These are sound policies, but we must always be prepared to look at them again, we must never be trapped by what we have and we must update them and conceive new ideas to go ahead.  And this is true not just of the government but also of Singapore , also of society.

14        The Ministry of Education recently did a survey of CEOs and employers. They wanted to know how the employers looked at the output from our schools, looked at the young generation of people who are coming out from school, universities, working, what are their strengths and weaknesses.  And they made many observations, but it boiled down basically to one key point which I think we know at the bottom of our hearts, sometimes we don't articulate it, and it is this – we are so capable, we are so efficient, we are so comfortable that we stick with what we have tried and tested and found working and we are reluctant to take risks and try new things.  And that is a weakness.  It's a weakness which we have to overcome.

15        The key to overcoming this is a mindset change.  We have to see opportunities rather than challenges in new situations, we have to be less conventional, we must be prepared to venture and you've got to do this as individuals, we've got to do this as a government and I think we have to do it as a society.  Let me give you some examples of what I mean.  As individuals, let me give you a personal example because this is something which is true of all of us and me, too. 

16        One day recently, I was coming back to Singapore Changi Airport , Arrival Hall, immigration counters.  The security officer said, "Walk through".  I said, "No, let me queue up and see what it's like".  So, I came in.  There are about eight counters, right?  "All Passports", "All Passports", "All Passports", "All Passports". The last two say "Singapore Passports Only".  What shall I do?  The "All Passports" counters were all empty.  The "Singapore Passport" counters had a long queue.  So, I looked at this -- this doesn't make sense.  Why is everybody doing that?  They should go across.  Then, I thought of it more, I thought maybe, they know something I don't.  So, I joined them at the "Singapore Passports" counter.  I stood there for 30 seconds.  I said, "This doesn't make sense", went across, sailed through.  The girls smiled at me, beamed, offered me a sweet.  So, I think the pressure to conform, to go with what we're comfortable with -- he's doing it, let's do the same -- it happens to all of us.  I think it's something we have to combat.  Nobody is there, let's go there first, see what happens.  So, that's on the individual level.  I am sure you have examples, but I will just stick to myself today.  

17        As a government, we have to rethink all our problems, big and small.  Nothing should ever be set in stone.  We've made big changes recently.  The GST changes is a big one.  The CPF cut was a big one and now, we are working on wage reform. That's another big one which will take some time and this will have a significant impact on our future.  So, we've got to change our policies or look at our policies.  We've got to support entrepreneurs.  We've got to support Singaporeans being spontaneous, being unconventional.  We should not put obstacles in their way.  We should help them to succeed. 

18        Let me give you one example.  These are the Duck and Hippo Tours.  You know what's a Duck Tour?  It's a boat with wheels where you take a ride, you go into the harbour, you sail around, you come back.  The Duck took two years to get a licence -- nearly died.  Very difficult because they went to the LTA (Land Transport Authority).  LTA says, "Your duck has a propeller, how can it be a car?"  They went to the MPA (Maritime and Port Authority of Singapore).  MPA says, "Your duck has wheels!"  So, ding-dong, it took two years.  Eventually, we sorted the problem.  The Duck became a success.  So, came the Hippo. The Hippo is a bus with no top, okay?  So, you sit on top, you drive around.  It's just like in London or one of the other Western cities.  Question -- Is the Hippo a bus?  A very important question because if it is not a bus, it is not allowed to stop at a bus-stop.  So, that one we did better.  Six months, we solved the problem.  I think we have to do better than that.

19        We also need, as a government, to encourage participation and debate.  We have opened up over the years.  We've got the Speakers' Corner.  We've allowed a lot more discussion.  If you read the newspapers, what the newspapers write, the columnists, the Forum Page writers, the degree of debate is much more than we used to have, or in Parliament.  But I think we can go further. 

20        So, there are two things we are going to do. One, for indoor talks, we are going to do away with licensing.  Right now, if you are going outdoors or indoors, if you want to do a talk, you need a Public Entertainment licence.  Usually, it's approved, it's not a problem, but once in a while, you are slow or the police have reservations, they say, "No", but it's very rare.  So now, we've decided we are going to exempt indoor talks from licensing requirements unless they touch on sensitive issues like race and religion.

21        The second thing we're going to do is to open up the Speakers' Corner where you can go and make any speech you like and we are going to say, "Well, if you want to go there and have an exhibition, go ahead".  Once in a while, Think Centre says they want to go to the Speakers' Corner and they want to plant 100 flowers there, let the 100 flowers bloom.  Well, I think go ahead.  They want to water the flowers, go ahead.  They want to turn the flowers down, go ahead.  I mean, free expression as long as you don't get into race and religion and don't start a riot.  It's a signal – speak, speak your voice, be heard, take responsibility for your views and opinions.

22        As a society also, we have to be forward-looking.  I asked some young people what they would like me to say tonight and one of them said this – "Be forward-looking.  Don't let elders deter you by saying it cannot be done or scare you with war stories".  Maybe, I was telling him war stories because I know him.  I agree that you shouldn't be scared by your elders, but I think you should listen to them, think carefully what their lessons mean in this new day and age and then use those lessons to avoid unnecessary mistakes and solve problems our way today.  But we have to be prepared to accept the diversity of views and to listen to the debate and to have this discussion, always with a view to moving Singapore forward. 

23        Let me give a controversial example.  It's quite a controversial one.  Some people told me, "Don't raise it, it’s your first rally speech, very dangerous", but I'm going to do it anyway.  It's to do with the casino. 

24        We've said, "No'' to the casino for a very long time.  I've said "No" to the casino for a very long time.  In 1985, we had a recession.  I remember the late Mr Teh Cheang Wan wanted the casino, argued for it.  We said, "No".  We didn't proceed.  This time round, we had the ERC (Economic Review Committee).  The Subcommittee has put up the proposal for a casino.  On the ERC, I said, "No", a majority of the members said, "No".  We didn't recommend it.  

25        But the subject didn't die and we have to reconsider because the argument comes up, the situation changes. 

26        Why is the situation different?  Because there are "cruises to nowhere", more and more cruises to nowhere.  Some don't even cruise, some anchor nowhere.  You can go to Batam.  I'm told there are 13 down there.  I haven't been there, but Wong Kan Seng has been.  He told me it was by accident, and Singaporeans go there.  So, Singaporeans are already doing this, right? 

27        Then you want tourists. There are millions of tourists because the Indians have money to spend, the Chinese have money to spend.  Every tour group to Singapore goes to Genting.  Macau is opening up.  Now, they have broken the monopoly, new operators, more shows, more games.

28        If we want to grow our tourism traffic and double the number of tourists to Singapore, we don't just want them to come here because of gambling, but if gambling is one of the things they want to do, then maybe we should allow them to do that in Singapore, find some way to do that and if, as a result of that, I get, over 10 years, double the traffic volume, I think we should think about it. 

29        So, MTI has come with a new proposal, not just a casino, but an integrated resort, entertainment centre.  So, you have shows, you have family entertainment, you have food, restaurants, art, all sorts of things and in the middle, of course, you also have this place. 

30        Should we say, "No"?  Well, I think we should take a deep breath and think about it carefully. I know many Singaporeans have expressed concerns and very strong concerns and the religious groups particularly have very strong views and their objections are not irrelevant.  They are valid objections.  It's because of these objections that for so long, we haven't done this.  But I think we shouldn't just say, "No".  I think we should consider -­ can we have the casino and still contain the social problems?  Let's study it.  Let's see if there's some way to do it. 

31        So, I think what we are going to do is to request for proposals.  Let's put out to say we are going to impose the following restrictions: Singaporeans below a certain income, you don't go.  I mean, if they want to travel all the way to Batam, that's them, but we will not make it easy for people to go broke and ruin their families in Singapore .  But if a millionaire wants to bring another millionaire friend from China or India , I don't think I should say "no" to him.  It may help lessen my other taxes.  So, I think we will find a reasonable restriction, draw a line, call for the proposals, test the market.  Let's see what proposals come in.  If it makes sense and people think that this is worth doing commercially, we make a judgment, we proceed.  If it's not worth it, not worth the downside risks, then we will call it off. 

32        We will consider all views before deciding.  Finally, if we decide against it, then I think we will have had a valuable debate in our society, a valuable discussion and sent a strong signal that we are prepared to discuss all sorts of things and reopen long-settled issues.  But if we decide to proceed, then the final solution which we implement will have to address the valid concerns which Singaporeans have raised.  So, it's not black and white.  I mean, it's looking for an appropriate middle way where we can have our cake and also eat most of it.

33        Increasingly, the world is going to be like that.  China opened up.  Deng Xiaoping said, "When you open the windows, the flies will fly in".  So, you can't close the windows, you'll just have to have a fly-swatter, a fly-trap, have one of these UV lights to zap them, but keep the windows open and keep your interior as clean and as hygienic for your own people as possible.  And I think that's the attitude we should have. 

V         What are our priorities?

34        So, with such a framework, with such an approach to our problems, what are our priorities?  There are many, but tonight, I would like to list just five of them. 

35        Firstly, external relations, making friends with other countries and protecting our interests overseas.  Secondly, building the economy, creating jobs, helping wages and incomes to go up, pressing on with upgrading, looking after those who are affected by this.  Thirdly, engaging the new generation.  Fourthly, educating, investing in our young so that they are not just learning to make a living for themselves but also developing their character and their emotional roots in Singapore and discovering their strengths and achieving their potential; not just for a few, but for every child and also to get them to learn their mother tongues.  And the fifth one, I put it last, but I'm sure you won't forget it, has to do with more babies.  But let me start with external relations even though I think for many Singaporeans, the economy is at the top of your minds.

VI        External relations

36        One thing which isn't going to change is our approach to external relations.  We seek to be friends with all countries, and especially with our immediate neighbours and the major powers.  We pursue win-win co-operation with all countries who are willing to co-operate with Singapore , but that doesn't mean that we can always accommodate the views or the positions of other countries.  When our vital interests are at stake, we must quietly stand our ground.  As Dr Habibie said, I'm sure you’ll remember, Singapore is a little red dot.  If we don't defend our interests, who will?  This approach has earned us respect internationally and a network of good relations with many countries around the world. 

37        From time to time, we are put to the test.  As a small country, we can't afford to flinch.  When Michael Fay was sentenced to caning for vandalism, Bill Clinton as President wrote to our President on his behalf.  But we couldn't remit his sentence of caning.  All we could do is to reduce two strokes.  From six, we went to four.  If this were a Chinese punishment, wu shi da ban (fifty floggings with the stick) would become si shi wu da ban (45 floggings).  And people in Asia noted our stand.  When PM Mahathir of Malaysia pressured us to change the water agreements, we stood firmly by our legal rights.  We gave a full public explanation of the negotiations with Malaysia – why we were justified in international law and we were prepared to go to any international tribunal.  But we still do our best to maintain good relations with the US and with Malaysia and, in fact, our relations with these two countries, I think, are good. 

38        Our closest neighbours are Indonesia and Malaysia .  They will always be of special importance to us.  Indonesia is holding its second round of the presidential elections soon.  Malaysia has a new PM.  I've known PM Abdullah Badawi for many years already and under him, our relations have taken a fresh start and I look forward to working with PM Abdullah Badawi to strengthen our bilateral relations further.  I was very grateful that after I was sworn in, the next day he gave me a call to congratulate me and to wish me well.  So, I said I look forward to working with him.

39        We have broad relations with China for many years since the visit of Deng Xiaoping to Singapore – he was then the Vice-Premier – in 1978. And we want to deepen these relations for the future.  Unfortunately, our ties with China are currently under some strain after the Chinese reaction to my recent visit to Taiwan . 

40        I've seen letters to the press – Straits Times, also Zaobao, also Berita Harian – which show they understand the Government's position and I am grateful for the support they've shown the Government.  But nevertheless, tonight, let me explain why I needed to visit Taiwan, why Singapore is not changing its one-China policy and why I've become more worried about the cross-straits situation after my visit. 

41        Why did I visit Taiwan ?  Because the cross-straits situation is the most serious security problem in the region, the most dangerous problem.  Economically, China and Taiwan are getting closer together.  They say half-a-million Taiwanese work in China , but politically, the two are drifting apart.  China has made it very clear that if Taiwan moves towards independence, China is not going to stand idly by and war may be inevitable. 

42        In this current, very tense situation, I will have to make some very difficult judgment calls as PM.  I wanted to understand the thinking of my friends and contacts in Taiwan .   Some of them are now key leaders on both sides, on the Pan-Green side and on the Pan-Blue side.  I needed to sense the shifts in the tone and texture of Taiwanese society.  Only then can I make an objective assessment with conviction and knowledge.  You've got to talk to people, feel them, sense their mood, their body language, the atmosphere in the society and I can't get this feel just by sitting in my office surfing the Internet, reading reports, even secret reports, or watching CNN or CNA. It’s not possible. You have to be there.

43        If other countries are going to take Singapore 's views and assessments of the cross-straits situation seriously, then they've got to view us as informed, impartial and balanced.  If Singapore can help in some way to prevent miscalculations by some key players, then we are going to do our utmost to do so.  We are small, we are not influencing the events, but we can provide some inputs to help the key players avoid mistakes and misjudgments. 

44        Why did I go in July?  Because Chok Tong had told me that the handover would be in August and so, July was the only window for me to go before becoming PM.

45        The Chinese have protested that my visit to Taiwan was contrary to Singapore 's one-China policy.  But Singapore has always observed the one-China policy.  We took this position right from our independence in 1965.  In 1971, we voted for PRC's admission into the UN to take its UN seat.  In October 1990, we established diplomatic relations with China .  By then, China understood Singapore 's position on Taiwan , that historically, we have unique and important interests there which continue to be vital to our security today. 

46        Two years after we established diplomatic relations with China , I visited Taiwan in 1992.  I was then already DPM.  So, my recent visit to Taiwan is not my first one under these circumstances, it's my second one, and it doesn't contradict our one-China policy.  Nor can it be seen as emboldening Taiwan independence elements.  This makes no sense because the Taiwanese know too well that we stand for one China and are opposed to Taiwan independence. Indeed, we are very worried by the growth of Taiwan independence forces. 

47        Singapore 's one-China policy will not change.  A move by Taiwan towards independence is neither in Singapore 's interests nor in the region's interests.  If Taiwan goes for independence, Singapore will not recognise it.  In fact, no Asian country is going to recognise it.  Nor will the European countries.  China will fight.  Win or lose, Taiwan will be devastated.  Unfortunately, I met only very few Taiwanese leaders who recognised t, his reality.  The problem is that it's not going to be just Taiwan which is going to be damaged.  It will be a grave setback for the whole region.  Our hope for China to emerge peacefully and for the region to prosper through investments and trade and tourism will be shattered. 

48        In any case, I think it would be the height of absurdity for Singapore to want to quarrel with China over the question of Taiwan because the cross-straits issue is not a permanent problem.  It will be resolved sooner or later – either sooner if matters come to a head when Taiwan amends its Constitution, or later, eventually, if the situation evolves peacefully over two or three decades, China continues to grow and Taiwan's economy is progressively integrated into China's economy.  The process is inexorable; there can be no other final outcome.

52        So, I don't sense, therefore, that the Taiwanese people appreciate the international strategic environment. They don't understand how preoccupied the US is with the war in Iraq , how much they want to settle North Korea , how interdependent America and China have already become.  Many also don't realise how rapidly China is transforming itself and how major powers in the world are repositioning themselves in response to a rising China . The problem is made worse because they have a rule that if you are a government officer, a political leader or a civil servant, you cannot visit China .  So, the business people know, but the political leaders and the civil servants who are making policy, they can read the reports, but they have not seen firsthand Shanghai, Suzhou, Wuxi, Shenzhen, how China has changed and how Taiwan's position has changed.

53        Many Taiwanese believe that China will not use force on Taiwan even if it moves towards independence. They are wrong.  I visited China in May.  I met the top leaders. The cross-straits issue was at the top of their agenda and China is absolutely serious. For China , the 2008 Olympics is a small matter, but preventing Taiwanese independence is crucial to China . 

55        Therefore, there is a real risk of miscalculation and mishap.  If war breaks out across the straits, we will be forced to choose between the two sides.  As a friend of both sides, any decision is going to be painful, but if the conflict is provoked by Taiwan , then Singapore cannot support Taiwan . 

56        I will not change our one-China policy.  But I had no choice but to make this visit to Taiwan in order to be confident that I can take the right decision for Singapore in a looming crisis. 

58        I regret that my visit to Taiwan has caused this severe reaction in China which affected relations.  I also regret the way the Taiwanese media chose to play up my private and unofficial visit. 

59        This isn't going to be the last time our relations with a major friendly power are strained.  We strive for good relations with all countries, but from time to time issues are going to arise and big powers have their own interests and will exercise their influence to get their way.  We may be old friends, but when our interests diverge, or even when our approaches to the same problem differ, they have to put their interests first and their approaches first and so must we.  This is a reality of the compelling pressures of international politics and of national interests and we must remember this.  

VII       Restructuring our economy

60        Let me move on to domestic affairs now and talk about restructuring the economy, which I think, for many Singaporeans, is the item at the top of your agenda. 

61        Our economy is doing well because we have been restructuring it, because we have been taking the painful but necessary steps and we have made ourselves competitive and so, this year, we've got 10 per cent growth in the first half and maybe 8 or 9 per cent for the year.  It's because of restructuring, it's not by chance. The challenge for us is how to continue growing and the answer is, well, we've got to continue to restructure, we've got to continue to upgrade. 

62        It's difficult, it's painful, it's tiring, but it's not just Singapore .  It's a worldwide trend because of globalisation.  It's happening everywhere. There is ferocious competition.  The developed countries are facing it, in America , in Europe .  The developing countries are facing it, China and India .  We see them as ferocious competitors.  They see other China men and other Indians as ferocious competitors.  So, we are afraid of 1,300 million Chinese, maybe. They are afraid of 1,299 million Chinese, too.  And the competition is ferocious.  So, the result is less job security, more need to adapt as the market changes.  And overall, if you look at it in broad trends, I think in the developing countries, where they've upgraded themselves and got their infrastructure right and their rules right and their conditions right, like the coastal cities in China, like some cities in India, I think that their incomes will rise because they are very cheap now. 

63        In the developed countries, in Germany where they have too much social welfare and they can't afford it; in America where their wages are very high and things can be done cheaper overseas, even for programmers, even for skilled workers, even doctors, I think in the developed countries, the incomes are going to fall.  So the bottom is going to come up and the top is going to come down, we are somewhere in between.  What happens to us?  I think we have to try and push our incomes up and to do that, we have to restructure, upgrade, improve our productivity and make our labour markets more flexible so that when the conditions change, when business change, we can also get our companies to alter, to adapt, to get into the new business and get out of the old business so that they can continue to be productive and can continue to make a living for Singaporeans.

64        So, we talk about wage reform.  It's not just flexible wages, a few more bonuses here and there, the MVC (Monthly Variable Component), but defining goals for the company, setting goals for the workers, rewarding them according to their goals.  It's what people call KPIs, key performance indicators.  So, you have a key performance indicator – how many boxes you move or how many chips you make, how low your defect rate is, getting people motivated to do the right thing so that they will be productive, so that they will align their interests and they can earn a good living. 

65        And that's what we have been trying to do this year – we've had a tripartite taskforce, we had recommendations in January, we've made good progress – hotels, banks, some other sectors have restructured already and other companies should also follow, especially the SMEs (small- and medium-sized enterprises) who find it more difficult.  And the economy is picking up.  In fact, that's a good time to restructure because then you can build up the buffer of the variable bonus.  When the economy i